Money Mondays: What is the S&P 500?

You might have asked yourself but what actually is the S&P 500 and why does everyone talk about it. So today we're gonna answer that question. Because once you know it'll be like well damn that makes sense. Let's dive in. 

Not just what it is. But why it matters. And what to do about it.

Do You Feel Like..

People will talk about how the S&P 500 is up or down or on a merrygoround and then they continue with their chat but you're stuck on the fact of like what is the S&P? And why does everyone care about it? 

Simply put the S&P (Standard & Poor) 500 is a list of the top 500 companies in the US. Think of it as a guest list to the Met Gala. The whose who of the world. It's a benchmark of how successful the company is. The best of the best. A financial benchmark is a reference point. Think of this as like in work your performance is benchmarked to what average or good or exceeds expectations looks like. Same same. 

So the S&P is the guest list.

The S&P is used as a benchmark of how the economy is doing. When it's up the economy is healthy and doing well. When it's down there is always speculation of a recession. Because it covers so many different sectors and types of companies it's really used as a health check of the US economy. Which is why everyone talks about it all the time. 

The way I think about it is the S&P 500 is the guest list. Anyone allowed in the party has to be on it. So now you might be asking yourself okay, but how does one invest in it? Which girlfriend, great fucking follow up question. Via an Index Fund. 

And the Index Fund is the party planner. 

The S&P (so annoying to type) is just the list. How you invest in it is an Index Fund that tracks the S&P. Stay with me. Think of it like this. The Met Gala is coming up and the top celebrities list is released. This is who should be invited based on how cool they are. Then the party planner decides okay, out of these people, whose the coolest and how much time they should get on the red carpet. There are dozens of index funds that track the S&P 500, like VOO, IVV, SPY, SPYM, FXAIX, SWPPX, VFIAX. 

Each fund has a different party planner who says, how much time each celebrity gets in front of the camera based on who they think is the best. So VOO might say dude, Dua Lipa is really having a moment right now, we need to give her 10 minutes. She's who the people want to see. Verses SPY might say no we're only giving her 5 minutes because we believe Ann Hathaway should get 15 minutes. 

The cool thing is when the S&P 500 changes the list - ie a company is sucking this year so they get the boot or like a huge company IPO'ed last year and now meets the requirements by like reporting positive profits over that time period too - the index funds do the hard work for you of rebalancing. ie giving the bad the boot and promoting the good ones. 

This is like the party planner having to tell Kevin Hart he's off the party list because Alex Cooper is running an empire and has surpassed him. Saving you from that awkward talk (and having to pay any taxes for selling). 

If you're looking at all the fund options and wondering okay but which one do I choose? Thats exactly what I'll be teaching the badass women in the Invested Program. Which starts this Thursday August 27, 2026. 9:30 - 10:30 am EST. The program is 12 weeks and only a $1500 investment. 

You know what they say: the best time to plant a tree was 20 years ago. The second best time? Now. 

Don't let more time pass you by, I only have 2 seats left in this program. Reply here to get signed up because they will go fast. 

We rise together.