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THE MARKET WHISPERER 16 5

The Most Important Market
Index: S&P 500

The S&P 500 index (symbol: SPX) is the most important index in the world.
Without doubt, for traders it is the focal index, the king, the trader’s crown
and scepter. It was developed by the financial services company Standard
& Poor’s, giving rise to its initials. This index displays the prices of the 500
largest-traded US companies via a formula that calculates the importance
and influence of these top 500 companies according to S&P specialists’
considerations. Standard and Poor’s is considered of highest quality due

to its broad range, and it serves as the benchmark for measuring the entire
market performance. Of course, the S&P serves managers of portfolios,
investment funds, hedge funds, and more in every stock exchange

throughout the world.
For example: an investment fund that succeeds in providing its investors

with a positive yield of 8% when the S&P rose only 6% will proudly declare
that it has “beaten the market.” On that matter, let me state that research
consistently shows the horrific fact that 80% of the world’s investment
funds do not succeed in beating the market. Therefore, next time you

receive your investment fund’s annual report, proudly flashing its positive

annual return, discover the truth by comparing the results to the market

outcomes. In most cases, you will be sorely disappointed. In fact, I have

never found a fund that is able to beat the market over the long term.

SMART Do you want to beat 80% of the funds? Buy market basket ETFs.
MONEY Research over a twenty-year period shows that 80% of funds
worldwide do not succeed in beating the market index.

Note: from this point on, whenever I refer to “the market” or “the
market index,” I will be referring to the S&P 500 index.

The rise and fall of indices are measured in percentages, but stock