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90 Don’t Make Me Say I Told You So

The Standard & Poor’s 500 Index (S&P 500) is an index of
500 stocks chosen for market size, liquidity, and industry

grouping. It’s meant to be a more accurate indicator of the
U.S. market because it contains 500 stocks from across the

spectrum, not just 30 stocks like the DJIA. The S&P 500 is a
market value weighted index – each stock’s weight in the index

is proportionate to its market value. Many consider it to be the
definition of the market, and the DJIA an antiquated measure

of a small group of blue-chip stocks.

Another index for large-cap stocks, which is lesser known

than the Dow and the S&P 500, is the S&P 100, which is made

up of the largest 100 companies of the S&P 500. It is best known
by its symbol, OEX. Examples of large-cap stocks:

► Wal-Mart

► General Electric

► IBM

► Exxon Mobil

► Coca-Cola

Large-cap stocks usually supply widely-used goods and
services. They typically have established histories, and,

in many cases, are dominant players in their industries.
Compared with mid-cap and small-cap stocks, large-caps

Chapter 3: You Must Have Growth In Your Portfolio