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Tag Archives: Inside the S&P 500

Jan 13, 2015

Inside the S&P 500: How Sector Weights Adjust for Oil

From May 30th 2014 to last Friday, January 9th, the energy sector in the S&P 500 was down 18.1% while the overall index was up 6.3%. As energy under-performs the overall index, its weight within the index is dropping, reducing the impact of further energy weakness on the index.  The energy sector weight is down by…


Dec 12, 2014

Inside the S&P 500: The Dividend Aristocrats

Dividends are ever-popular with investors, but owning dividend stocks or an ETF which tracks an index focused on dividends comes with one big worry: will the companies continue to pay dividends?  One of the surest signs that a stock is about to collapse is when the company announces it is reducing or eliminating the dividend. …


Aug 7, 2014

Inside the S&P 500: An Active Committee

The S&P 500 is maintained by a committee of market professionals.  We publish a detailed methodology document which includes guidelines for selecting stocks and other changes to the index.   Unlike many other S&P Dow Jones Indices and the majority of indices offered by other index providers,  there are no rigid or absolute rules for the…


Mar 30, 2014

Inside the S&P 500: Multiple Share Classes

Later this week when Google’s class C shares begin trading there will be 500 companies but 501 different ticker symbols and stocks in the S&P 500.  And beginning September 15, 2015, companies in the 500 which have multiple share classes will have all their liquid classes included.  The weight of each company will represent the…


Feb 7, 2014

Inside the S&P 500: PE and Earnings Per Share

Two carefully watched numbers are the earnings per share (EPS) and the price-earnings ratio (PE) on the S&P 500.  Their popularity stems from the wide spread use of the index and its long data history.  EPS is the market analysts’ gauge corporate profits in the US while the PE is their measure of value.  While…


Dec 6, 2013

Inside the S&P 500: Multiple Share Classes and Voting

Google’s expected stock split has focused attention the treatment of multiple share classes in the S&P 500 and other indices. Most US companies, but not all, have only one class of common stock and each share is entitled to one vote.   In some companies with multiple share classes, one class is publicly traded and the…


Nov 22, 2013

Inside the S&P 500: What makes a Company U.S.?

The S&P 500 is an index of U.S. companies.  But, exactly what a U.S. company is can be complicated.  Traditionally being U.S. company meant being incorporated in the US. However, in the last few years companies that many think of as being American are not incorporated here.  Nielsen Holding, the company which compiles ratings of…


Aug 8, 2013

Inside the S&P 500: Dividends Reinvested

Slightly more than 400 of the 500 companies included in the S&P 500 pay dividends.  At the current rate, these dividends will be a bit over 2% of the value of the index.  In a strong market like the one enjoyed in the last 12 months when the index price rose over 20%, an extra…


Aug 6, 2013

Inside the S&P 500: What Made it Rise… or Fall?

The first question asked as the market closes is why did it go up? Or, if the results were less appealing, why did it fall?  Either way the usual answer of more buyers than sellers is no answer at all.  The real question is what sectors pushed the market higher or which stocks sent it…


Jul 30, 2013

Inside the S&P 500: Float adjustment

Most stock indices where the weight of each stock depends on its market value are “float adjusted” meaning that the index only counts those shares that are available to investors and excludes closely held shares or shares held by governments or other companies. The S&P 500 moved to float adjustment in in 2004-2005.  Initially many…


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