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Across My Desk: S&Ps Birthday

Okay, I'm a little late but just in case you missed it, last month was the 50th anniversary of the S&P500.

The index began on March 4, 1957 and during its past five decades has closed up 6,608 days; down 5,900 days; and flat 73 days.

Looking closer at the particulars, when the index closed up the average daily gain was 2.71 points. And, when it was in the tank the average daily losses were similar at 2.8 points. As for the blahs, the average has lost ground on 5,900 days, with the average loss being 2.80 points.

During its first day in existence, March 5, 1957, the closing price of the S&P 500 was 44.42. It took until June 4, 1968 for the index to close above 100 and until November 2, 1985 for it to close above 200. On February 2, 1998 was the first time closed at or about 1,000.

Other S&P500 tidbits:

  • Its highest close was 1,527.46, on March 24, 2000.

  • The S&P 500's "best" year was 1958, when it rose 38.06%.

  • Its worst year was 1974, when it lost 29.72%.

  • Its best one-day point gain was on March 16, 2000, when it rose 66.33 points; its worst one-day point loss was two days earlier on March 14, 2000, when it fell 83.95 points.

  • The index's best one-day percentage gain of 9.10% was set on October 21, 1987, just after the October 19 market tumble - which also turned out to be the S&P 500's worst one-day percentage loss, 20.47%.

  • October 1987 was the S&P 500's worst month when it closed the month down 21.76%. Its best was October 1974 when it gained 16.30%.

  • The S&P 500's best quarter on record was 1975's first quarter. Then, it gained 21.59%: It's worst was the third quarter of 1974,when it fell 26.12%.

    Eighty-six stocks have been in the index since 1957 - the best stock to hold would have been Altria (formerly Phillip Morris), where $1 invested would now be worth more than $8,400.

    To be included in the S&P 500, a company must have float-adjusted market capitalization of more than $4 billion and meet published guidelines for inclusion.

    So, what can investors learn from these S&P500 tidbits? First and most importantly, that the stock market is a changing one that can also be very volatile. Second, that there actually is money that can be made by investing in stocks---provided your company picks are correct and your timing dead on. And third, that over the past 50 years the closing price of that index has multiplied in value more than 34 times.

    To find out more about the S&P 500 visit: www.standardandpoors.com/indices. An S&P 500 fact sheet is available at: www2.standardandpoors.com/spf/pdf/index/500factsheet.pdf.

    To read more articles, please visit the column archive.

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