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Definition: An index of five hundred major stocks. This is considered a benchmark for mutual funds because fund managers want to outperform this index.
TeenAnalyst Advice: As mentioned, this is essentially the benchmark for investors and mutual funds to beat. When someone says they "beat the market," they're usually referring to earning a higher return than the S&P 500.
The S&P 500 is not an equal-weighted index like the Dow Jones Industrial Average. Instead, it's market cap weighted. This means that the bigger companies make up more of the index.
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