This Fact About the S&P 500 Should Bring Investors Peace of Mind
The S&P 500 is an index that tracks the 500 largest public U.S. companies by market cap. The S&P 500 contains companies and industry leaders from every major sector, and its performance has become synonymous with the stock market's performance as a whole. It's how many investors gauge how well (or badly) the stock market is doing.
After an unprecedented 1.5-year rally following the 2020 COVID-19 bear market, the S&P 500 experienced a humbling 2022. The stock market's most popular index finished 2022 down more than 18% (including dividends). However, this shouldn't alarm long-term investors with time on their side. Here's why.
One thing to note about stock prices is that they reflect investors' thoughts, feelings, and actions, and since humans are known to be irrational, stock prices behave similarly. The one certainty in the stock market is uncertainty. Volatility is as much a part of the stock market as stocks themselves, and the sooner investors understand that, the easier it becomes to block out short-term noise and distractions.
Source Fool.com
