The S&P 500 is the most widely-used benchmark for the US stock market. It covers roughly 80% of total US market cap and spans every major sector.
You invest in it via index funds and ETFs like VOO, SPY, or IVV. Over long periods it has returned roughly 10% annually on average (about 7% after inflation), with wide year-to-year variation.
See also
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Open Decision Lab →Frequently asked questions
Is the S&P 500 diversified?
Across US large-caps, yes. It's not diversified across countries, sizes, or asset classes — many investors combine it with international and bond exposure.
Related terms
Index
A basket of stocks used to measure a market or segment.
Index fund
A fund that mirrors an index rather than trying to beat it.
ETF (exchange-traded fund)
A fund holding many stocks or bonds that trades like a single share.
Market capitalization
Share price multiplied by the number of shares outstanding.