The S&P 500 introduced its first stock index in 1923. From its inception until 1957, its primary stock market index was the S&P 90. This was a value weighted index based on 90 stocks. It was not until 1957 that the S&P became what we know today as the S&P 500. To get listed on the S&P, a company has to be selected by a committee. The majority of the companies on the index are American, but there a small number of non American companies. Each company that gets selected to be on the index normally represents industries that are in the US economy.
Investors trading stocks in the S&P can also buy shares in ETFs. One such ETF originating from a string of other ETFs are SPDRs, which is the Standard & Poor’s Depositary Receipts. With volumes typically between 300-400 million shares a day, this makes the SPDR the highest traded stock out of all the other US exchanges. As an investor who is stock picking companies on the stock market, you should consider large cap companies. They have a better chance of outperforming the market and are generally less risky than investing in unknown smaller cap companies.
Before you can get started, you need to find a broker who can execute trades for you. There are numerous brokers available who can help you invest on the S&P and other stock indexes. Before choosing the first brokerage firm you come across, you need to shop around. With so many companies on the stock market today, a broker will help you get the best stock picks and can forecast the direction of the markets through technical analysis.
Brokers who give you all these extra services will charge a higher commission. If you are familiar with stock charts and can do your own chart analysis, then you may choose to use a discount broker. They will not stock pick for you or provide you with stock tips. Instead, they will only execute the orders you give them, making their commissions much lower.
If you are an absolute beginner at investing, then you should do research on buying stock on the various indexes that you can trade on. Join stock market video it will guide you through the markets and give you an overview of the major indexes like the S&P, Dow, Nasdaq or the Nyse.