Evolution of the S&P 500 Composition

Killer graphic below from this Corrie Dreibusch story at the Wall Street Journal documenting the S&P 500’s evolution.

At the beginning, the famed index was all industrial stocks, utilities and rails (made sense in the 1950’s). Financials weren’t awarded their own category until the 1970’s and in the years since there’s been a huge rethink of sector composition. Last week, REITs were spun out of the Financials and are now their own sector – at 3% of the whole.

To me, the most important line in the story is the final one, quoting S&P Dow Jones committee member David Blitzer: “At the end of the day, it’s more an art, not a science.”

Driebusch highlights the inconsistencies of the index, such as rivals Wal-Mart and Target being in two different sectors (Staples and Discretionary, respectively) and Amazon, which has evolved into a monster in cloud technology being listed as a Discretionary rather than a Tech company because they used to be mainly a bookseller.

To which I would add, the worship of these indices, as though they were created wholly from data and not a mix of subjective opinions, is the real problem. I refer to this sort of thing as Scientism. It’s a massive distraction for investors to obsess over how they’re doing versus a passive index that is, itself, created actively.

Anyway, here’s the index and how its changed, in a great graphical format. Take a look (click to embiggen!):

spx-evolution

Source:

Real Estate Gets Its Own Home in the S&P 500 (WSJ)

What's been said:

Discussions found on the web
  1. click here commented on Sep 14

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  2. w88 commented on Sep 20

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  3. eatverts commented on Sep 23

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  4. bitcoin loophole reviews commented on Sep 28

    … [Trackback]

    […] Here you will find 5560 additional Information to that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  5. used crossovers winnipeg commented on Sep 30

    … [Trackback]

    […] There you will find 3957 more Information on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  6. Gym music 2020 commented on Nov 02

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  7. รับทำเว็บไซต์ commented on Nov 30

    … [Trackback]

    […] There you can find 96763 more Info on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  8. Regression Testing Definition commented on Dec 01

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  9. buy ruger magazines online commented on Dec 01

    … [Trackback]

    […] Read More here to that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  10. rolex replica commented on Dec 17

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  11. Institutional Repository commented on Dec 30

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  12. replica bvlgari watch replika commented on Dec 31

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  13. wigs for women commented on Jan 22

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

  14. rbc bank canada commented on Jan 26

    … [Trackback]

    […] Find More here on that Topic: thereformedbroker.com/2016/09/19/evolution-of-the-sp-500-composition/ […]

Read this next.