S&P is short for Standard & Poor’s. This represents an index of 500 stocks chosen for many of their characteristics, the most important being market size, liquidity and industry grouping. The main reason the S&P was created is that it serves as a proxy for US stocks, but also reflects the risk/return characteristics of the large-cap universe. It is actually a market value weighted index. This means that the weight of each stock in the index is proportional to its market value.
Companies included in the index go through a tough selection by the S&P Index Committee. This team is made up of a team of analysts and economists from Standard & Poor’s.
Each corporation is assigned a stock symbol. This is basically a memory aid used to uniquely identify a corporation’s publicly traded shares in a particular stock market. For example, the letters KO symbolize the Coca Cola Company. Exxon Mobile Company is symbolized by the characters XOM, McDonalds by MCD, etc. This not only makes it easier to find while searching the index, but also easier to remember.
Then there is the SEC filing, a financial statement or other formal document filed with the US Securities and Exchange Commission (SEC). These papers are generally necessary for public companies, in order to eliminate any speculation. That is why they are free for anyone to view in the SEC’s EDGAR database. A very good idea, because you have at your disposal general information, such as your business and postal address, your field of activity, your year end, and many other characteristics that can be useful when you plan to become a future client.
Last but not least, every company has a Global Industry Classification Standard (GICS). This means your industry sector, as defined by your primary business activity. Beware of sub-industries, because the type of products they produce divides some of the sectors. For example, Financial Institutions are divided into Banks, Diversified Financial Institutions, Insurance and Real Estate.
According to the price list, the Washington Post occupies the first position with 605.50, followed by Google with 486.53 and CME Group Inc, with 342.11. Other companies included in this important index include Apple Inc., Chevron Corp., Amazon Corp., Colgate-Palmolive, PepsiCo Inc., NIKE Inc., Philip Morris Intl., Hewlett-Packard, Harley-Davidson, and many other well-known brands.