I vividly remember a commercial with the tag line “leave off the last S for savings!” I had to look it up, but I found it. It was a 1992 ad for Dial-A-Mattress. And while that might not mean anything to most people, it reminds me of that era, where the S&P 500 Index ($SPX) was still taking a backseat to the Dow Jones Industrial Average ($DOWI). When the 1987 crash occurred, and the market fell by more than 22% in a single October day, the headlines screamed “Dow falls by 500 points.” If you had asked investors how the S&P 500 did, they would have responded predictably: “What’s the S&P 500?”
Fast forward to 2025, and 38 years post-crash, the S&P 500 is the reigning stock market indicator. But should it be? And if not, why?
