Have you ever wondered "What is the S&P 500?" - but felt a little silly asking?

When I was conducting research with high-earners under age 50, many shamefully confessed they didn’t actually know many terms they felt they “should” – these terms were so basic and common, that they were too embarrassed to ask.

What was one key term? The S&P 500.

Why does the financial media talk about the S&P 500 every day?

• The S&P 500 is for investments like the temperature for weather. It’s an easy way for the media to share what is happening today.

• The S&P 500 is simply a list of 500 large companies, and the Dow Jones is a list of 30 large companies. Reporters share the collective performance of the stock prices of these lists of companies every day.

• But just like the temperature on any single day doesn’t tell you much about the temperature of a place over time, what happens in the market in one day isn’t particularly useful if you are a long-term investor.

  • For example, if you own a house, you probably don’t look at the change in the price of your house on a daily basis.
    

  

  
  But if you are a reporter, sharing how the S&P 500 performed is an easy way to sum up what happened to the markets today.
  
  Unfortunately, what is common practice in the financial media isn’t necessarily helpful for investors. That is critically important to understand. That is why I've created my Master Your Money program, exclusively for women investors, to cut through the jargon, simplify complex concepts that help you approach your finances with confidence.