Investing in the S&P 500

The speaker, Ben Felix, is a Portfolio Manager at PWL Capital and is discussing whether or not investing in the S&P 500 is a good idea. The S&P 500 is a stock index of 500 US stocks covering around 80% of the US market capitalization and is one of the oldest and best-known stock indexes in the world. There is a lot of money invested in the S&P 500, with $3.4 trillion invested in index funds that track the S&P 500. The S&P 500 has a great track record, beating the CRSP 1-10 US Total Market Index with lower volatility. One of the arguments for investing in the S&P 500 is its past performance, which has been almost impossibly good according to a 2018 analysis. However, the likelihood of this performance repeating itself in the future is extremely low, and the S&P 500 is more actively managed than people realize, as the stocks that go into the index are selected by a committee, not by an algorithm.