Ask a Fool: What is the S&P 500?

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In the spirit of better investing, and in celebration of the first annual Worldwide Invest Better Day (WWIBD) coming up on September 25, Motley Fool analysts will be answering user- and reader-submitted questions leading up to the big event. "Ask a Fool" anything, and we'll do our best to help you investbetter.

The S&P 500 (INDEX: ^GSPC) is a capitalization-weighted index whose components are weighted by the total market value of outstanding shares. Because it's weighted this way, companies that are disproportionately larger -- like Apple (NAS: AAPL) and Exxon (NYS: XOM)  -- have the most influence over the index, while those on the smaller end, like MAKO Surgical (NAS: MAKO) and First Solar (NAS: FSLR) , have a much lower weighting. In the following video, Fool.com analyst Austin Smith goes over everything that investors need to know about the S&P 500.

 


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The article Ask a Fool: What is the S&P 500? originally appeared on Fool.com.

Austin Smith owns shares of Apple and MAKO Surgical. The Motley Fool owns shares of Apple, MAKO Surgical , and ExxonMobil. Motley Fool newsletter services recommend Apple, First Solar, and MAKO Surgical . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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