Very few people understand the concept behind the S&P 500. They know that it is the benchmark index; the one that everyone looks at and judges portfolios performance on.
It all comes down to a very basic understanding of risk and reward and how to build a portfolio. It's the combination of different securities inside the portfolio as to which possible securities offer the best return with the least amount of risk.
Today we'll completely break down the concept of building the most efficient portfolio of stocks possible and also explain why the investment community as a whole uses the S&P 500 as it's benchmark index.