38
votes
Why do most of the stock market's gains occur overnight? It has an overall loss during the daytime
A couple of possible reasons:
A disproportionate amount of stock-market risk (e.g., scheduled economic and earnings releases) happens outside market hours, with the goal of avoiding destabilization ...
- 30.3k
36
votes
Accepted
Why do ETFs that replicate the S&P 500 vary significantly in price?
The ETFs are designed to replicate the return. Don't get hung up on the price.
Illustrative Example:
Say you have two ETFs both designed to replicate the return of an index. Call these ETFs A ...
- 1,259
35
votes
Accepted
Why is the dividend yield on the S&P 500 so low?
Stock buybacks are an alternative way of returning money to shareholders that is being used instead of dividends. Some reasons to prefer buybacks are:
Each shareholder can choose when to realize ...
- 466
27
votes
Accepted
Do I understand correctly that while index funds (based on S&P or Dow Jones) generally go up, it might take a decade?
Historically, 20 year market returns have always been positive but there have been a number of 10 year periods where it lost money. The most recent one was from 2000 to 2009 and is called the Lost ...
- 77k
24
votes
Why do most of the stock market's gains occur overnight? It has an overall loss during the daytime
Per the request above:
The market reacts to overnight news which includes after hours earnings announcements, economic reports, overseas trading, etc. (very, very few companies announce earnings ...
- 77k
19
votes
Why do ETFs that replicate the S&P 500 vary significantly in price?
The unit is arbitrary. It doesn't mean anything.
I buy these special paint can liners. Some stores sell 4 for $4.00, others sell 5 for $5.00 and others sell 6 for $6.00. It's exactly the same thing ...
19
votes
Why is the dividend yield on the S&P 500 so low?
Why is the growth of the value of dividends significantly lower than
the growth of the value of stocks in the S&P 500?
The 500 companies that makeup the index determine if they pay their ...
- 145k
18
votes
Do I understand correctly that while index funds (based on S&P or Dow Jones) generally go up, it might take a decade?
There are no guarantees on either the short or long term that any investment will continue to rise. That has just been the general trend historically. You can always take any two arbitrary dates and ...
- 53.5k
16
votes
Accepted
S&P 500 constituent holdings not proportional to market cap?
The weights of S&P 500 constituents are rebalanced quarterly (every three months). In between the rebalances, the ratio of index constituent weights may differ from the ratio of their actual ...
- 17.2k
15
votes
How often do the S&P 500 components change?
The S&P 500 constituents are rebalanced on a quarterly basis on the third Friday of March, June, September and December on the basis of their weighting and other relevant factors.
Intra-quarter ...
- 3,934
13
votes
Why do most of the stock market's gains occur overnight? It has an overall loss during the daytime
The following items could play a factor:
Intraday margin is higher (e.g. 4x leverage for intraday but 2 x for overnight), causing people to buy at the open (push the price up) and sell at the close (...
- 5,173
12
votes
Does investing in the S&P 500 for 3 years yield better yearly returns than investing for 15 years?
It depends which 3 years (and which 15). If you had bought the S&P500 index fund in the 2004-2005 time range, your 3 year returns would be small, nothing, or even negative, depending on how ...
- 9,553
10
votes
Does investing in the S&P 500 for 3 years yield better yearly returns than investing for 15 years?
"the average return for 3, 5, 10, 15 years is 9%, 8%, 13% and 7.6% respectively"
I suspect this really means that the returns using the S&P average over the previous 3, 5, 10, 15 years is … . ...
- 1,576
9
votes
What is the minimum time an S&P 500 index fund should be given before selling?
I don't need funds at this time.
Then there's nothing to do.
If the strategy is "buy and hold" then you keep holding. When you need capital you assess your allocations and potentially sell some of ...
- 49.1k
7
votes
Do I understand correctly that while index funds (based on S&P or Dow Jones) generally go up, it might take a decade?
The "ten year" rule is not "you're guaranteed to make money in ten years", it's rather that "in a less than ten year period, invest more cautiously, in a ten or more year ...
- 35.9k
6
votes
Where people invest during stock market crash (USA Q4 2018 crash)?
There is no money, and it doesn’t go anywhere. A company’s market cap is just the market’s opinion of what it’s worth. That opinion changes all the time, but no actual money is involved. Money only ...
- 23.7k
6
votes
Accepted
Tracking S&P in Germany
There are numerous companies offering ETFs that conform to EU regulations (UCITS); among the largest active in Germany are iShares, Lyxor, db x-trackers, ComStage, and Vanguard. (Note that some of ...
- 372
6
votes
Accepted
Why is it hard to find a list of individuals currently on the S&P 500 Index Committee?
I found a good article about how Standards & Poors decides which companies are included in the S&P 500 index. It's from quite a while ago (year 2000), but it's somewhat definitive as it was ...
- 31.8k
5
votes
Chinese Stock Market crash much less severe during Covid-19/SARS-CoV-2 crisis - Why?
Good question, here are 2 (among many) possible answers:
The Chinese Government seems to manage the stock market directly at times. I.e. There are stories (like the one above) where the governments ...
- 191
5
votes
Do I understand correctly that while index funds (based on S&P or Dow Jones) generally go up, it might take a decade?
It could take a lot longer
The US is something of a special case, having had large and relatively steady growth for over a century.
There is no guarantee this trend will continue.
There have been ...
- 51
5
votes
Accepted
Can I buy index funds without margin and own it like a stock?
Yes, but you'll want to trade an ETF or mutual fund instead of a CFD. See if your broker offers ETFs on that index (I presume the S&P 500) instead of CFDs. If not, look for a more traditional ...
- 142k
4
votes
Does investing in the S&P 500 for 3 years yield better yearly returns than investing for 15 years?
I know that my logic is missing something crucial as I always assumed that the longer you leave your money for the closer it approaches to the long term average return. If you can get 9% a year for 3 ...
- 77k
4
votes
Accepted
Currency risk with a good index, or bad index with no currency risk
Large companies are multi-nationals such that it really doesn't matter where they are based. But the European banks have large operations in Europe and are currently hurt by zero interest rates.
...
- 3,592
4
votes
Accepted
Balanced index fund that tracks S&P 500
Is there any ETF / Index Fund that tracks the S&P 500 and that holds both stocks and bonds?
No, because the S&P 500 does not contain any bonds, so trying to track that index with both stocks ...
- 142k
4
votes
Accepted
S&P 500 vs DJIA
Is this because it no longer makes sense to track the DJIA? If so, why?
Some reasons come to mind:
The DJIA consists of only 30 companies, so it is more risky since one company can make large ...
- 142k
4
votes
What is the correct ticker for the S&P 500?
The S&P 500 is just an index - a list of specific stocks, it is not an investible instrument. What you are finding are some ETFs that track the S&P 500's returns, as well as ETFs that track ...
- 142k
3
votes
Indexes like S&P 500 vs simply tracking earnings?
Because most of the growth in an index fund is not due to dividends paid by the stocks it holds, but by the increase in the price of the stocks. That increase has no obvious, direct relationship to ...
- 11.2k
3
votes
Where people invest during stock market crash (USA Q4 2018 crash)?
The price of U.S. Treasury securities are up in the past month. Gold is up and the Yen is up. The Swiss Franc is not completely at a one month high.
There have been ETF inflows into a Treasury fund ...
- 3,592
3
votes
Accepted
What will happen to the stock market, once governments increase interest and stop quantitative easing?
Is this the more or less direct result of quantitative easing?
Yes.
(EDIT: and all that 401(k) and IRA money needing somewhere to go.)
Is it also a result of low interest rates?
That's what QE ...
- 50.8k
3
votes
How often do the S&P 500 components change?
The index rebalances quarterly. Different fund providers have different approaches to the rebalance. Some might try to rebalance a little ahead of the index. Others may try to track as closely as ...
- 2,791
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