The S&P 500s $20 trillion value… how did we get here?

  • February 16, 2017
Mike Jones S&P

Mike Jones

Investment Insights

Mike Jones

As I was driving to work this past Monday morning, a reporter for Bloomberg Radio announced that the collective value of the S&P 500 had exceeded TWENTY TRILLION DOLLARS for the first time ever.

Here is what it looks like: $20,000,000,000,000.00. What a big number!

Long live the capitalists!

Then I started thinking. What does that mean? Is it a good thing or a bad thing?Should I be happy or worried? But mostly, how did this happen?

The American experiment, both politically and financially, is a historical marvel. To think that all that we have and the way we govern was a mere idea in the mind of a few men just 241 years ago is astounding.

First, citizens must be free if they are going to have any chance at pursuing their own independence and success. Second, the rule of law must be predominant across the country to ensure stability for investments to grow. Third, there must be a system or infrastructure in place that allows those with savings to invest for a potential return.

The United States of America, with all of its imperfections, can look at this number–$20,000,000,000,000.00 for its 500 biggest companies–and proudly say, “We did this!” No other country even comes close.

How did this happen financially? Honestly, how did the investors in the S&P 500 people make all of this money in the stock market?

At the very beginning of the process, somebody or a group of somebodies must have an idea which needs funding while others have savings/money to invest.

Then there must be trust. Those with the money must trust that the funds invested will be used for the purpose intended. Then money is invested (underwriting). Add to this ways to measure and track the progress (accounting) and a daily auction for those seeking some access to their money (stock market) as well as overseers to investigate complaints and to enforce the rules (regulators).

Before you know it those savings turn into buildings and airplanes and restaurants and computers and banks and oil wells and …

Then one day someone with a very sophisticated spreadsheet adds up all they are worth at auction today and reports that the tally is $20,000,000,000,000.00.

Impressive!

mike signature small


Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800. This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at bmoore@argentadvisors.com or to Mike Jones at mjones@argentadvisors.com.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.
Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc. client, please remember to contact Argent Advisors, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.

The S&P 500s $20 trillion value… how did we get here?The S&P 500s $20 trillion value… how did we get here?