Home » Articles » Index Investing » What Is the S&P 500, and How Does It Work?

What Is the S&P 500, and How Does It Work?

by | Last updated 20 Jan, 2023 | Index Investing

The Standards and Poor’s 500, or S&P 500, is one of the world’s most widely tracked stock market indices. Containing 500 of the largest publically traded US companies by market capitalisation, the index is commonly used as a performance benchmark for investment portfolios or as a gauge of the general health of the US economy.

The S&P 500 is also a weighted index. As such, the largest companies have a more significant impact on its overall performance. It’s also worth pointing out that due to some firms having a dual-class share structure, there are, in fact, 503 stocks contained within its ranks.

The history of the S&P 500 dates back to 1923 when Standard & Poor’s introduced a series of indices covering 26 industries. However, the index as we know it today wasn’t formed until 1957. And is now maintained by a joint venture called S&P Dow Jones Indices, which is majority owned by S&P Global Inc. S&P Global is also a constituent of the S&P 500 index.

How does the S&P 500 work?

As previously said, the S&P 500 index is a free-float market-capitalisation-weighted index. It contains the largest 500 enterprises, including the 30 businesses that make up the Dow Jones Industrial Average index.

As of 19 January 2023, it has a combined market capitalisation of $32.60trn. Compared to the $40.51trn of total US equities, the S&P 500 represents roughly 80.5% of the total US stock market. This is the main reason why it’s such a popular proxy for the performance of the US stock market as a whole.

Criteria for joining the S&P 500 index

While size is important, other criteria must be met for a business to be included within the index.

  • The company must be an American business. 
  • It must have a market cap of at least $8.2bn.
  • It must have at least 50% of its shares outstanding available for public trading. 
  • Its shares must be listed on either the New York Stock Exchange, Nasdaq Exchange, or Chicago Board Options Exchange.
  • Its shares must have the sufficient trading volume to be highly liquid.
  • Its combined net earnings over the last four quarters must be positive.

If a company already in the index no longer meets these criteria, it will be removed and replaced by the next most appropriate stock. The addition and removal of businesses occur every time the index is rebalanced on the third Friday of March, June, September, and December.

How is the S&P 500 index calculated?

The level of the S&P 500 is calculated based on the combined market capitalisation of its constituent members. As a weighted index, not every stock has the same influence on the price. The weighting of each company is calculated by comparing the firm’s market cap to the total market cap of the S&P 500.

\frac{Company Market Cap}{SP 500 Market Cap} = Weighting (%)

In reality, the index’s total value is also affected by a Divisor factor controlled and moderated by S&P Dow Jones Indices. This factor is revised at regular intervals and exists to keep the index consistent when certain events take place.

For example, during a merger or acquisition of an S&P 500 stock, the index could suffer a significant drop if the replacement company isn’t roughly the same size (which is usually the case). The factor is subsequently altered to keep the index stable and adjusted over time to ensure the reported index level is understandable.

Another purpose for the Divisor factor is to prevent index manipulation by businesses. When a company executes a share buyback scheme, it causes its market capitalisation to increase and, therefore, the weighting within the S&P 500. As index funds track the performance of the S&P 500 by replicating its portfolio, this increased weighting invites additional investment, which pushes its market cap even further along with its weighting in an artificial and unsustainable loop.

Top 10 S&P 500 stocks

Below are the top 10 S&P 500 stocks in order of market capitalisation as of 30 December 2022.

RankCompanyTickerSector
1Apple IncAAPLTechnology
2Microsoft CorpMSFTTechnology
3Amazon.com IncAMZNConsumer Discretionary
4Berkshire Hathaway BBRK.BFinancials
5Alphabet Inc AGOOGLCommunications
6UnitedHealth Group IncUNHHealthcare
7Alphabet CGOOGCommunications
8Johnson & JohnsonJNJHealthcare
9Exxon Mobil CorpXOMEnergy
10JP Morgan Chase & CoJPMFinancials

What is the average return on the S&P 500?

As previously mentioned, the S&P 500, in its current form, was first launched in 1957. And since then, the index has grown considerably. The total return (capital gains + dividends) over the last 65 years is approximately 55,269%. That’s the equivalent of a 10.2% annual return on investment.

Based on these figures, a $1,000 investment in 1957 would be worth roughly $553,690 today. But the historical performance of the index changes depending on which time frame an investor is using.

Time FrameTotal ReturnAnnualised Total ReturnInflation-Adjusted Annualised Total Return
Last 50 Years14,791%10.34%6.20%
Last 40 Years8,433%11.50%8.52%
Last 30 Years1,542%9.50%6.92%
Last 20 Years391%7.93%5.44%
Last 10 Years255%12.40%9.91%
Last 5 Years83%10.94%7.62%
Source: Irrational Exuberance Dataset, Robert Shiller

Due to certain tax laws, the US stock market has historically been more fond of using share buybacks to return excess capital to shareholders. However, multiple companies within the S&P 500 pay shareholder dividends, with yields ranging from 6.7% to 1.07%. As of 17 January 2023, the average dividend yield of the S&P 500 stood at 1.68%.

S&P 500 vs other indices

The S&P 500 is one of many equity indices in the stock market. Others include the Dow Jones Industrial Average and Russell 2000 in the United States. Another popular index across the pond in the United Kingdom is the FTSE 100. But how do these indices compare?

S&P 500 vs FTSE 100 

Similar to the S&P 500, the FTSE 100 index contains the largest 100 largest British stocks by market capitalisation listed on the London Stock Exchange. It’s also a market cap-weighted index. However, the S&P 500 has historically been more volatile.

The volatility difference is made apparent when looking at their respective performances during the 2022 stock market correction. The S&P 500 suffered a 19.4% decline over the 12-month period. By comparison, the FTSE 100 was flat. But this stability comes with historically inferior returns. On average, the UK index has delivered a total annual return of 7.15% versus the S&P 500’s 10.2%.

S&P 500 vs Dow Jones 

The Dow Jones is an index of 30 large businesses listed on US stock exchanges. Unlike the S&P 500, the Dow Jones is a price-weighted index with more limited coverage. It’s one of the oldest and among the most followed indices globally. The index could not escape the 2022 bear market as the index is down over 8%.

S&P 500 vs Russell 2000

The Russell 2000, like the S&P 500, is a market capitalisation-weighted index. Unlike the S&P 500, it comprises exclusively of 2,000 small-cap stocks. The index, like the general market, plunged this year. Russell 2000 is down over 21% in 2022 and, in the past five years, up 14.70%. FTSE Russell, a subsidiary of the London Stock Exchange, maintains the index.

Is the S&P 500 a good investment?

Historically, the S&P 500 has delivered solid returns for long-term investors. And it’s why the index is one of the most widely tracked benchmarks by investors and index funds. However, there are some caveats to consider.

Advantages

  • Instant Diversification – An investor has indirectly bought shares in every company within the underlying index by owning an index fund. Consequently, a portfolio is automatically diversified across multiple businesses, industries, and geographies.
  • Low Fees – Index tracker funds are almost always passively managed. Lower management fees come with a smaller expense ratio and, subsequently, deal less damage to total investment returns. Investing through an index fund is also typically more cost-effective than buying shares of each individual stock in an index.
  • Notable Growth – The index has historically provided double-digit annual returns. And over long time periods has led to the creation of impressive volumes of wealth for patient investors.

Disadvantages

  • Sector Concentration – The majority of growth delivered in the last decade primarily stems from technology stocks. Investing in an S&P 500 index fund consequently results in being potentially overly concentrated in a single sector. This risk factor is one of the main reasons why the index fell hard in the 2022 stock market correction.
  • Volatility – Sector concentration also opens the door to increased levels of volatility that can cause large fluctuations within an investment portfolio.
  • No Control – Index tracker funds do not have a stock selection criteria beyond a business being a constituent of the index being tracked. As such, it’s possible for investors to indirectly own shares in companies that may not align with their ethical or moral values. For example, there are several tobacco stocks within the S&P 500. However, there is no way to avoid these businesses when buying shares in an index fund.

Whether the S&P 500 is a good investment largely depends on the individual investor. Everyone has different investing objectives, risk tolerances, and time horizons that must be considered before making an investment decision.

S&P 500 index sector weightings

Companies within the S&P 500 cover a broad range of industries with some concentration within the Technology, Healthcare, and Financials sectors.

Sector30 December 2022
Technology25.7%
Healthcare15.8%
Financials11.7%
Consumer Discretionary9.8%
Industrials8.7%
Communications7.3%
Consumer Staples7.2%
Energy5.2%
Utilities3.2%
Materials2.7%
Real Estate2.7%
Source: S&P Dow Jones Indicies

List of all S&P 500 companies

TickerCompanySector
MMM3MIndustrials
AOSA. O. SmithIndustrials
ABTAbbottHealthcare
ABBVAbbVieHealthcare
ACNAccentureTechnology
ATVIActivision BlizzardCommunications
ADMADMConsumer Staples
ADBEAdobe Inc.Technology
ADPADPTechnology
AAPAdvance Auto PartsConsumer Discretionary
AESAES CorporationUtilities
AFLAflacFinancials
AAgilent TechnologiesHealthcare
APDAir Products and ChemicalsMaterials
AKAMAkamaiTechnology
ALKAlaska Air GroupIndustrials
ALBAlbemarle CorporationMaterials
AREAlexandria Real Estate EquitiesReal Estate
ALGNAlign TechnologyHealthcare
ALLEAllegionIndustrials
LNTAlliant EnergyUtilities
ALLAllstateFinancials
GOOGLAlphabet Inc. (Class A)Communications
GOOGAlphabet Inc. (Class C)Communications
MOAltriaConsumer Staples
AMZNAmazonConsumer Discretionary
AMCRAmcorMaterials
AMDAMDTechnology
AEEAmerenUtilities
AALAmerican Airlines GroupIndustrials
AEPAmerican Electric PowerUtilities
AXPAmerican ExpressFinancials
AIGAmerican International GroupFinancials
AMTAmerican TowerReal Estate
AWKAmerican Water WorksUtilities
AMPAmeriprise FinancialFinancials
ABCAmerisourceBergenHealthcare
AMEAmetekIndustrials
AMGNAmgenHealthcare
APHAmphenolTechnology
ADIAnalog DevicesTechnology
ANSSAnsysTechnology
AONAonFinancials
APAAPA CorporationEnergy
AAPLApple Inc.Technology
AMATApplied MaterialsTechnology
APTVAptivConsumer Discretionary
ACGLArch Capital GroupFinancials
ANETArista NetworksTechnology
AJGArthur J. Gallagher & Co.Financials
AIZAssurantFinancials
TAT&TCommunications
ATOAtmos EnergyUtilities
ADSKAutodeskTechnology
AZOAutoZoneConsumer Discretionary
AVBAvalonBay CommunitiesReal Estate
AVYAvery DennisonMaterials
BKRBaker HughesEnergy
BALLBall CorporationMaterials
BACBank of AmericaFinancials
BBWIBath & Body Works, Inc.Consumer Discretionary
BAXBaxter InternationalHealthcare
BDXBecton DickinsonHealthcare
WRBBerkleyFinancials
BRK.BBerkshire HathawayFinancials
BBYBest BuyConsumer Discretionary
BIOBio-RadHealthcare
TECHBio-TechneHealthcare
BIIBBiogenHealthcare
BLKBlackRockFinancials
BKBNY MellonFinancials
BABoeingIndustrials
BKNGBooking HoldingsConsumer Discretionary
BWABorgWarnerConsumer Discretionary
BXPBoston PropertiesReal Estate
BSXBoston ScientificHealthcare
BMYBristol Myers SquibbHealthcare
AVGOBroadcom Inc.Technology
BRBroadridge Financial SolutionsTechnology
BROBrown & BrownFinancials
BF.BBrown–FormanConsumer Staples
CHRWC.H. RobinsonIndustrials
CDNSCadence Design SystemsTechnology
CZRCaesars EntertainmentConsumer Discretionary
CPTCamden Property TrustReal Estate
CPBCampbell Soup CompanyConsumer Staples
COFCapital OneFinancials
CAHCardinal HealthHealthcare
KMXCarMaxConsumer Discretionary
CCLCarnivalConsumer Discretionary
CARRCarrier GlobalIndustrials
CTLTCatalentHealthcare
CATCaterpillar Inc.Industrials
CBOECboe Global MarketsFinancials
CBRECBRE GroupReal Estate
CDWCDWTechnology
CECelaneseMaterials
CNCCentene CorporationHealthcare
CNPCenterPoint EnergyUtilities
CDAYCeridianTechnology
CFCF IndustriesMaterials
CRLCharles River LaboratoriesHealthcare
SCHWCharles Schwab CorporationFinancials
CHTRCharter CommunicationsCommunications
CVXChevron CorporationEnergy
CMGChipotle Mexican GrillConsumer Discretionary
CBChubb LimitedFinancials
CHDChurch & DwightConsumer Staples
CICignaHealthcare
CINFCincinnati FinancialFinancials
CTASCintasIndustrials
CSCOCiscoTechnology
CCitigroupFinancials
CFGCitizens Financial GroupFinancials
CLXCloroxConsumer Staples
CMECME GroupFinancials
CMSCMS EnergyUtilities
KOThe Coca-Cola CompanyConsumer Staples
CTSHCognizantTechnology
CLColgate-PalmoliveConsumer Staples
CMCSAComcastCommunications
CMAComericaFinancials
CAGConagra BrandsConsumer Staples
COPConocoPhillipsEnergy
EDConsolidated EdisonUtilities
STZConstellation BrandsConsumer Staples
CEGConstellation EnergyUtilities
COOCooperCompaniesHealthcare
CPRTCopartIndustrials
GLWCorning Inc.Technology
CTVACortevaMaterials
CSGPCoStar GroupIndustrials
COSTCostcoConsumer Staples
CTRACoterraEnergy
CCICrown CastleReal Estate
CSXCSXIndustrials
CMICumminsIndustrials
CVSCVS HealthHealthcare
DHID.R. HortonConsumer Discretionary
DHRDanaher CorporationHealthcare
DRIDarden RestaurantsConsumer Discretionary
DVADaVita Inc.Healthcare
DEJohn DeereIndustrials
DALDelta Air LinesIndustrials
XRAYDentsply SironaHealthcare
DVNDevon EnergyEnergy
DXCMDexcomHealthcare
FANGDiamondback EnergyEnergy
DLRDigital RealtyReal Estate
DFSDiscover FinancialFinancials
DISHDish NetworkCommunications
DISDisneyCommunications
DGDollar GeneralConsumer Discretionary
DLTRDollar TreeConsumer Discretionary
DDominion EnergyUtilities
DPZDomino’sConsumer Discretionary
DOVDover CorporationIndustrials
DOWDow Inc.Materials
DTEDTE EnergyUtilities
DUKDuke EnergyUtilities
DDDuPontMaterials
DXCDXC TechnologyTechnology
EMNEastman Chemical CompanyMaterials
ETNEaton CorporationIndustrials
EBAYeBayConsumer Discretionary
ECLEcolabMaterials
EIXEdison InternationalUtilities
EWEdwards LifesciencesHealthcare
EAElectronic ArtsCommunications
ELVElevance HealthHealthcare
LLYEli Lilly and CompanyHealthcare
EMREmerson ElectricIndustrials
ENPHEnphaseTechnology
ETREntergyUtilities
EOGEOG ResourcesEnergy
EPAMEPAM SystemsTechnology
EQTEQTEnergy
EFXEquifaxIndustrials
EQIXEquinixReal Estate
EQREquity ResidentialReal Estate
ESSEssex Property TrustReal Estate
ELThe Estée Lauder CompaniesConsumer Staples
ETSYEtsyConsumer Discretionary
REEverest ReFinancials
EVRGEvergyUtilities
ESEversourceUtilities
EXCExelonUtilities
EXPEExpedia GroupConsumer Discretionary
EXPDExpeditors InternationalIndustrials
EXRExtra Space StorageReal Estate
XOMExxonMobilEnergy
FFIVF5, Inc.Technology
FDSFactSetFinancials
FASTFastenalIndustrials
FRTFederal RealtyReal Estate
FDXFedExIndustrials
FITBFifth Third BankFinancials
FRCFirst Republic BankFinancials
FSLRFirst SolarTechnology
FEFirstEnergyUtilities
FISFISTechnology
FISVFiservTechnology
FLTFleetcorTechnology
FMCFMC CorporationMaterials
FFord Motor CompanyConsumer Discretionary
FTNTFortinetTechnology
FTVFortiveIndustrials
FOXAFox Corporation (Class A)Communications
FOXFox Corporation (Class B)Communications
BENFranklin TempletonFinancials
FCXFreeport-McMoRanMaterials
GRMNGarminConsumer Discretionary
ITGartnerTechnology
GEHCGE HealthCareHealthcare
GENGen DigitalTechnology
GNRCGeneracIndustrials
GDGeneral DynamicsIndustrials
GEGeneral ElectricIndustrials
GISGeneral MillsConsumer Staples
GMGeneral MotorsConsumer Discretionary
GPCGenuine Parts CompanyConsumer Discretionary
GILDGilead SciencesHealthcare
GLGlobe LifeFinancials
GPNGlobal PaymentsTechnology
GSGoldman SachsFinancials
HALHalliburtonEnergy
HIGHartford (The)Financials
HASHasbroConsumer Discretionary
HCAHCA HealthcareHealthcare
PEAKHealthpeakReal Estate
HSICHenry ScheinHealthcare
HSYHershey’sConsumer Staples
HESHess CorporationEnergy
HPEHewlett Packard EnterpriseTechnology
HLTHilton WorldwideConsumer Discretionary
HOLXHologicHealthcare
HDHome Depot (The)Consumer Discretionary
HONHoneywellIndustrials
HRLHormel FoodsConsumer Staples
HSTHost Hotels & ResortsReal Estate
HWMHowmet AerospaceIndustrials
HPQHP Inc.Technology
HUMHumanaHealthcare
HBANHuntington BancsharesFinancials
HIIHuntington Ingalls IndustriesIndustrials
IBMIBMTechnology
IEXIDEX CorporationIndustrials
IDXXIdexx LaboratoriesHealthcare
ITWIllinois Tool WorksIndustrials
ILMNIlluminaHealthcare
INCYIncyteHealthcare
IRIngersoll RandIndustrials
INTCIntelTechnology
ICEIntercontinental ExchangeFinancials
IPInternational PaperMaterials
IPGThe Interpublic Group of CompaniesCommunications
IFFInternational Flavors & FragrancesMaterials
INTUIntuitTechnology
ISRGIntuitive SurgicalHealthcare
IVZInvescoFinancials
INVHInvitation HomesReal Estate
IQVIQVIAHealthcare
IRMIron MountainReal Estate
JBHTJ.B. HuntIndustrials
JKHYJack Henry & AssociatesTechnology
JJacobs SolutionsIndustrials
JNJJohnson & JohnsonHealthcare
JCIJohnson ControlsIndustrials
JPMJPMorgan ChaseFinancials
JNPRJuniper NetworksTechnology
KKellogg’sConsumer Staples
KDPKeurig Dr PepperConsumer Staples
KEYKeyCorpFinancials
KEYSKeysightTechnology
KMBKimberly-ClarkConsumer Staples
KIMKimco RealtyReal Estate
KMIKinder MorganEnergy
KLACKLA CorporationTechnology
KHCKraft HeinzConsumer Staples
KRKrogerConsumer Staples
LHXL3HarrisIndustrials
LHLabCorpHealthcare
LRCXLam ResearchTechnology
LWLamb WestonConsumer Staples
LVSLas Vegas SandsConsumer Discretionary
LDOSLeidosIndustrials
LENLennarConsumer Discretionary
LNCLincoln FinancialFinancials
LINLinde plcMaterials
LYVLive Nation EntertainmentCommunications
LKQLKQ CorporationConsumer Discretionary
LMTLockheed MartinIndustrials
LLoews CorporationFinancials
LOWLowe’sConsumer Discretionary
LUMNLumen TechnologiesCommunications
LYBLyondellBasellMaterials
MTBM&T BankFinancials
MROMarathon OilEnergy
MPCMarathon PetroleumEnergy
MKTXMarketAxessFinancials
MARMarriott InternationalConsumer Discretionary
MMCMarsh McLennanFinancials
MLMMartin Marietta MaterialsMaterials
MASMascoIndustrials
MAMastercardTechnology
MTCHMatch GroupCommunications
MKCMcCormick & CompanyConsumer Staples
MCDMcDonald’sConsumer Discretionary
MCKMcKessonHealthcare
MDTMedtronicHealthcare
MRKMerck & Co.Healthcare
METAMeta PlatformsCommunications
METMetLifeFinancials
MTDMettler ToledoHealthcare
MGMMGM ResortsConsumer Discretionary
MCHPMicrochip TechnologyTechnology
MUMicron TechnologyTechnology
MSFTMicrosoftTechnology
MAAMid-America Apartment CommunitiesReal Estate
MRNAModernaHealthcare
MHKMohawk IndustriesConsumer Discretionary
MOHMolina HealthcareHealthcare
TAPMolson Coors Beverage CompanyConsumer Staples
MDLZMondelez InternationalConsumer Staples
MPWRMonolithic Power SystemsTechnology
MNSTMonster BeverageConsumer Staples
MCOMoody’s CorporationFinancials
MSMorgan StanleyFinancials
MOSThe Mosaic CompanyMaterials
MSIMotorola SolutionsTechnology
MSCIMSCIFinancials
NDAQNasdaq, Inc.Financials
NTAPNetAppTechnology
NFLXNetflixCommunications
NWLNewell BrandsConsumer Discretionary
NEMNewmontMaterials
NWSANews Corp (Class A)Communications
NWSNews Corp (Class B)Communications
NEENextEra EnergyUtilities
NKENike, Inc.Consumer Discretionary
NINiSourceUtilities
NDSNNordson CorporationIndustrials
NSCNorfolk Southern RailwayIndustrials
NTRSNorthern TrustFinancials
NOCNorthrop GrummanIndustrials
NCLHNorwegian Cruise Line HoldingsConsumer Discretionary
NRGNRG EnergyUtilities
NUENucorMaterials
NVDANvidiaTechnology
NVRNVR, Inc.Consumer Discretionary
NXPINXP SemiconductorsTechnology
ORLYO’Reilly Auto PartsConsumer Discretionary
OXYOccidental PetroleumEnergy
ODFLOld DominionIndustrials
OMCOmnicom GroupCommunications
ONON SemiconductorTechnology
OKEONEOKEnergy
ORCLOracle CorporationTechnology
OGNOrganon & Co.Healthcare
OTISOtis WorldwideIndustrials
PCARPaccarIndustrials
PKGPackaging Corporation of AmericaMaterials
PARAParamount GlobalCommunications
PHParker HannifinIndustrials
PAYXPaychexTechnology
PAYCPaycomTechnology
PYPLPayPalTechnology
PNRPentairIndustrials
PEPPepsiCoConsumer Staples
PKIPerkinElmerHealthcare
PFEPfizerHealthcare
PCGPG&E CorporationUtilities
PMPhilip Morris InternationalConsumer Staples
PSXPhillips 66Energy
PNWPinnacle WestUtilities
PXDPioneer Natural ResourcesEnergy
PNCPNC Financial ServicesFinancials
POOLPool CorporationConsumer Discretionary
PPGPPG IndustriesMaterials
PPLPPL CorporationUtilities
PFGPrincipal Financial GroupFinancials
PGProcter & GambleConsumer Staples
PGRProgressive CorporationFinancials
PLDPrologisReal Estate
PRUPrudential FinancialFinancials
PEGPublic Service Enterprise GroupUtilities
PTCPTCTechnology
PSAPublic StorageReal Estate
PHMPulteGroupConsumer Discretionary
QRVOQorvoTechnology
PWRQuanta ServicesIndustrials
QCOMQualcommTechnology
DGXQuest DiagnosticsHealthcare
RLRalph Lauren CorporationConsumer Discretionary
RJFRaymond JamesFinancials
RTXRaytheon TechnologiesIndustrials
ORealty IncomeReal Estate
REGRegency CentersReal Estate
REGNRegeneronHealthcare
RFRegions Financial CorporationFinancials
RSGRepublic ServicesIndustrials
RMDResMedHealthcare
RHIRobert HalfIndustrials
ROKRockwell AutomationIndustrials
ROLRollins, Inc.Industrials
ROPRoper TechnologiesTechnology
ROSTRoss StoresConsumer Discretionary
RCLRoyal Caribbean GroupConsumer Discretionary
SPGIS&P GlobalFinancials
CRMSalesforceTechnology
SBACSBA CommunicationsReal Estate
SLBSchlumbergerEnergy
STXSeagate TechnologyTechnology
SEESealed AirMaterials
SRESempra EnergyUtilities
NOWServiceNowTechnology
SHWSherwin-WilliamsMaterials
SBNYSignature BankFinancials
SPGSimon Property GroupReal Estate
SWKSSkyworks SolutionsTechnology
SJMThe J.M. Smucker CompanyConsumer Staples
SNASnap-onIndustrials
SEDGSolarEdgeTechnology
SOSouthern CompanyUtilities
LUVSouthwest AirlinesIndustrials
SWKStanley Black & DeckerIndustrials
SBUXStarbucksConsumer Discretionary
STTState Street CorporationFinancials
STLDSteel DynamicsMaterials
STESterisHealthcare
SYKStryker CorporationHealthcare
SIVBSVB FinancialFinancials
SYFSynchrony FinancialFinancials
SNPSSynopsysTechnology
SYYSyscoConsumer Staples
TMUST-Mobile USCommunications
TROWT. Rowe PriceFinancials
TTWOTake-Two InteractiveCommunications
TPRTapestry, Inc.Consumer Discretionary
TRGPTarga ResourcesEnergy
TGTTarget CorporationConsumer Discretionary
TELTE ConnectivityTechnology
TDYTeledyne TechnologiesTechnology
TFXTeleflexHealthcare
TERTeradyneTechnology
TSLATesla, Inc.Consumer Discretionary
TXNTexas InstrumentsTechnology
TXTTextronIndustrials
TMOThermo Fisher ScientificHealthcare
TJXTJX CompaniesConsumer Discretionary
TSCOTractor SupplyConsumer Discretionary
TTTrane TechnologiesIndustrials
TDGTransDigm GroupIndustrials
TRVThe Travelers CompaniesFinancials
TRMBTrimble Inc.Technology
TFCTruistFinancials
TYLTyler TechnologiesTechnology
TSNTyson FoodsConsumer Staples
USBU.S. BankFinancials
UDRUDR, Inc.Real Estate
ULTAUlta BeautyConsumer Discretionary
UNPUnion Pacific CorporationIndustrials
UALUnited Airlines HoldingsIndustrials
UPSUnited Parcel ServiceIndustrials
URIUnited RentalsIndustrials
UNHUnitedHealth GroupHealthcare
UHSUniversal Health ServicesHealthcare
VLOValero EnergyEnergy
VTRVentasReal Estate
VRSNVerisignTechnology
VRSKVeriskIndustrials
VZVerizonCommunications
VRTXVertex PharmaceuticalsHealthcare
VFCVF CorporationConsumer Discretionary
VTRSViatrisHealthcare
VICIVici PropertiesReal Estate
VVisa Inc.Technology
VMCVulcan Materials CompanyMaterials
WABWabtecIndustrials
WBAWalgreens Boots AllianceConsumer Staples
WMTWalmartConsumer Staples
WBDWarner Bros. DiscoveryCommunications
WMWaste ManagementIndustrials
WATWaters CorporationHealthcare
WECWEC Energy GroupUtilities
WFCWells FargoFinancials
WELLWelltowerReal Estate
WSTWest Pharmaceutical ServicesHealthcare
WDCWestern DigitalTechnology
WRKWestRockMaterials
WYWeyerhaeuserReal Estate
WHRWhirlpool CorporationConsumer Discretionary
WMBWilliams CompaniesEnergy
WTWWillis Towers WatsonFinancials
GWWW. W. GraingerIndustrials
WYNNWynn ResortsConsumer Discretionary
XELXcel EnergyUtilities
XYLXylem Inc.Industrials
YUMYum! BrandsConsumer Discretionary
ZBRAZebra TechnologiesTechnology
ZBHZimmer BiometHealthcare
ZIONZions BancorporationFinancials
ZTSZoetisHealthcare

The bottom line 

Legendary investor Warren Buffett has long recommended investing in low-cost S&P 500 index funds. After all, the index has generated impressive returns that most novice investors would likely struggle to beat when picking individual stocks. However, like any investment, there is always an element of risk that needs to be considered.

Top 3 Stocks For Trying To Beat Rising Inflation

The stock market is reeling from the growing level of inflation. And with so many fantastic businesses trading at massive discounts, now could be the perfect time for savvy investors to snatch up some potential bargains.

Deciding which stocks to add to a shopping list during times like these can be daunting for new and seasoned investors.

That’s why our hotshot analysts at The Money Cog’s flagship Premium research service have just unveiled what they think could be the three best buys for investors right now.

What’s more, we’re sharing all three in a special FREE investing report available today!

Claim your free copy now


This article contains general educational information only. It does not take into account the personal financial situation of the reader. Tax treatment is dependent on individual circumstances that may change in the future, and this article does not constitute any form of tax advice. Before committing to any investment decision, an investor must consider their individual financial circumstances and reach out to an independent financial advisor if necessary.

Written By

Prosper Ambaka, Esq.

Prosper is a self-taught financial analyst and investor with years of experience. Inspired by Benjamin Graham, he employs a value-investing school of thought throughout his analyses. This has led to Prosper developing a wealth of knowledge in equities, foreign exchange, commodities, and global macroeconomic issues.

In 2019, he completed his Law degree and was called to the Nigerian Bar in 2021. Outside The Money Cog, Prosper encourages others to join the investment community through his lectures on financial literacy as well as investing strategies.

Current Holdings

NYSE:F, NYSE:ABEV, NYSE:GSAT, NASDAQ:ATER, NYSE:LTHM, NYSE:BB, NYSE:NOK, NASDAQ:SOLO, NASDAQ:RIDE, NYSE:VALE, NYSE:HPE, NASDAQ:CLOV, NYSE:EXPR, NASDAQ:AQMS, NASDAQ:IDEX

Edited & Fact Checked By
Zaven Boyrazian MSc

Zaven has worked in several industries throughout his career, from aircraft factories to game development studios. He has been actively investing in the stock market for the better part of a decade, managing over $1 million across multiple portfolios.

Specializing in corporate valuation, Zaven employs a modern take on the principles set out by Benjamin Graham to find new opportunities at fair prices.

Home » Articles » Index Investing » What Is the S&P 500, and How Does It Work?

Get stock ideas in your lunch break

Discover a path to financial freedom today
Learn More