S&P Indices - Part 1

From what I've seen there are dozens & dozens of indices provided by Standard & Poors (S&P) but, as an introductory blogging about these indicies we only need to consider seven of them as follows;

S&P 100
S&P 400
S&P 500
S&P 600
S&P 900
S&P 1000
S&P 1500

Essentially these seven are all composed from the following three indices

S&P 500
S&P 400
S&P 600

You may notice I did not list these three with the number portion of the index name increasing but, I did list them in order of size of stock they represent. For ease of understanding, one may think of stocks as coming in three sizes; small, medium and large. When we refer to size we are talking about Market Capitalization (Market Cap) which is the number of shares available for purchase times the price per share and then we may refer to stocks as being either Large Cap, Mid Cap or Small Cap

S&P 500 - Large Cap
S&P 400 - Mid Cap
S&P 600 - Small Cap

Now, you may know what it means to order a small, medium or large drink at McDonald's (MCD) but not so familiar with what those same terms refer to when referring to stocks so we shall elaborate with another brief list

S&P 500 - Large Cap - 4 billion and up
S&P 400 - Mid Cap - 1 to 4.5 billion
S&P 600 - Small Cap - 300 million to 1 billion

Also, we should mention that the number associated with each index (500, 400 or 600) actually refers to the specific number of stocks tracked with each index.

What you may notice if you actually look at the stocks in each index and it's corresponding market cap is that, for example, you will find mid cap stocks ranging from 400 million to 10 billion. This is due to the dynamic nature of stocks. Some will increase in value while others decrease. Non-the-less the initial Market Cap criteria considered by S&P is as stated above.

Another aspect of these indicies is the percentage of the total US market they represent. What's remarkable about the S&P 500 index is that even though there are literally thousands upon thousands of stocks available for purchase, the 500 stocks in the S&P 500 represent about 80% of the value of the total US stock market. To summarize;

S&P 500 - represents about 80% of total US value
S&P 600 - represents about 7% of total US value
S&P 400 - represents about 3% of total US value

Stay tuned for Part 2!