What Can You Learn From S&P Historical Data?

From S&P 500 historical data, investors can learn to recognize periods of low market volatility, which typically lead to periods of high volatility, states ETF Meter. Bonds diversify portfolios and provide protection against the damage volatility can cause. Exotic ETFs, such as SPXS and SPXU, provide further protection, as this type of ETF typically falls when the S&P 500 rises.

Because they are issued by sizeable, well-funded companies, S&P 500 stocks are relatively stable, reports TradingMarkets.com. In other words, companies with bigger market caps have additional influence on the overall value of the index. S&P 500-listed companies such as Worldcom and Lehman Brothers proved toxic, but these exceptions haven't obviated the popularity of S&P stocks.

From 2003 to 2013, the average S&P 500 stock outperformed the overall S&P 500 index, reportsTradingMarkets.com. This trend was made possible by the fact that the S&P 500 is a weighted index. This weighting helps ensure that the index adequately reflects the health of the overall stock market and the U.S economy. To qualify for inclusion in the S&P 500, a company must have its headquarters in the United States, according to Investopedia. Additionally, the company must have a market cap of at least $5.3 billion as of 2015.