What is the S&P?

The S&P is the most widely used index. It is said to track the performance of the US economy overall. The S&P 500 contains 500 large company’s stock (hints the name).

The interesting thing about the S&P is that you can trade it. SPY is the tradable version of the S&P. It is also said that the SPY goes up an average of 10% a year.

Most money managers use the SPY as a bar. They will try to beat the SPY as an investment. Most fail.

So should you buy the SPY? That is tough to say. Because the SPY only goes up on average 10% a year it is relatively easy for a trader to beat it. If however you are looking for a low risk low reward part of your portfolio it is probably not a bad idea to consider buying and holding the SPY.

What most traders will use the SPY as is an indicator to what is happening in the markets. Are the market’s bullish, bearish, ect.