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The Standard & Poor’s 500 Index, better known as the S&P 500, is a commonly-referenced barometer for the investment world on how the overall stock market is performing.  The S&P 500 is an American stock market index based on the overall market capitalization of 500 U.S.-based publicly-traded companies.  Said another way, the larger the company, the more weight it carries in the overall valuation of the index.  According to Fox Business, the year-to-date performance figures through early November were as follows:

·         Market cap over $100 billion (45 companies) = Up 8.5% on average

·         Market cap $50-$100 billion (49 companies) = Up 1.4% on average

·         Market cap $10-$50 billion (292 companies) = Down 0.5% on average

·         Market cap under $10 billion (118 companies) = Down 9.6% on average

The S&P has had a bumpy ride in 2015, and overall performance has been close to flat.  A few take-aways:

·         First, a reminder that the S&P 500 (or any single asset class index, for that matter) is not a sure-fire indicator of how the overall market is performing.  Even within the U.S. large companies, the largest are having a wildly different experience than their smaller peers.

·         International small companies have been the best performing equity asset class year-to-date, which is not reflected at all in the context of this S&P data.  However, in the broader sense of investing, it’s a good reminder to not get too focused on what we might otherwise assume is the best/safest way to invest, that being the largest U.S. publicly-traded companies.  Just look back to the first decade of the 2000’s for a lesson in avoiding too much home-bias when investing.

·         Stay diversified.


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