While both the DJIA and S&P 500 are used by investors to determine the general trend of the U.S. stock market, the S&P 500 is more encompassing, as it is based on a larger sample of total U.S. stocks.The following table shows the CAGR returns of the FAANG stocks over the past 5 years. The CAGR returns have been in the range of 23-40%. The significantly higher allocation towards FAANG stocks has ensured that Nasdaq 100 has outperformed S&P 500 index by a wide margin.The Dow, for example, has higher weightings in financials, healthcare, consumer discretionary, and industrials than the S&P 500 and Nasdaq Composite, but lower weightings in high-growth sectors like tech and communications (with the latter including Alphabet, Meta Platforms, Netflix, and other growth stocks).
Why the S&P 500 index might be a better measure of stock market performance than the Dow Jones Industrial Average : S&P 500 uses a market cap methodology, giving a higher weighting to larger companies, whereas the DJIA uses a price weighting methodology which gives more expensive stocks a higher weighting. Many investors believe a market cap methodology is a more accurate indication of true market conditions.
What’s better than the S&P 500
The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.
Is it smart to buy S&P 500 : Is an S&P 500 index fund a good investment As long as your time horizon is three to five years or longer, an S&P 500 index fund could be a good addition to your portfolio. However, any investment can produce poor returns if it's purchased at overvalued prices.
The Dow tracks 30 large U.S. companies but has limited representation. The Nasdaq indexes, associated with the Nasdaq exchange, focus more heavily on tech and other stocks. The S&P 500, with 500 large U.S. companies, offers a more comprehensive market view, weighted by market capitalization.
In these circumstances, one contributing factor is that historically The Dow has been somewhat more value-oriented, tracking well-established large-cap companies whose prices can tend to be less volatile. The S&P 500, while more diversified than The Dow, is sometimes more volatile.
What index is better than S&P 500
The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.The Bottom Line. Both the Dow and the Nasdaq are stock market indexes that provide insight into the broader economy. While the Nasdaq is also a stock exchange, the Dow is purely a stock market index.S&P MidCap 400 sectors outperformed 8 of their 10 S&P 500 counterparts. This suggests that the mid-cap segment not only delivered more reliable performance during the periods studied (outperformance in multiple periods), but it also outshined the large-cap segment in performance breadth (outperformance across sectors).
Vanguard S&P 500 ETF
ETFs are convenient and effective, to say the least. If you're interested in investing in an ETF and have $1,000 that you can spare to invest — meaning you already have an emergency fund saved and have paid down any high-interest debt — the Vanguard S&P 500 ETF (VOO 0.04%) is a great option.
Which fund gives the highest return : Quant Small Cap Fund(G) tops the chart with over 39% returns followed by Quant Mid Cap Fund(G), Nippon India Small Cap Fund(G), Quant Flexi Cap Fund(G) and Motilal Oswal Midcap Fund-Reg(G) in the same pecking order. 1.
What if I invested $1000 in S&P 500 10 years ago : Over the past decade, you would have done even better, as the S&P 500 posted an average annual return of a whopping 12.68%. Here's how much your account balance would be now if you were invested over the past 10 years: $1,000 would grow to $3,300. $5,000 would grow to $16,498.
How much will S&P be worth in 10 years
Stock market forecast for the next decade
| Year | Price |
|---|---|
| 2027 | 6200 |
| 2028 | 6725 |
| 2029 | 7300 |
| 2030 | 8900 |
S&P 500 index funds can help you instantly diversify your portfolio by providing exposure to some of the biggest companies in the U.S. Index funds in general are fairly inexpensive compared with other types of mutual funds, making them an attractive option for most investors.Between 2000 and 2020, private equity outperformed the Russell 2000, the S&P 500, and venture capital.
Should I invest in total stock market or S&P 500 : For investors with small-cap exposure elsewhere in their portfolios, the large- and mid-cap S&P 500 fund may suffice. But for a broader, one-stop-shopping fund, the total market index offers maximum diversification within the U.S. equity universe.