> Only the 500 best companies (according to a metric) are included and the companies are rotated in and out as that changes.
That is the thing.
What would the return have been if my grandpappy bought SAP500 65 years ago and kept those stocks he bought at the time until today? I have never seem such a number.
I mean if the loser stocks are rotated out it is hard to keep up with the index due to losses and transaction costs.
a bit out of date, missing at least one global financial crisis, but there's a 2004 paper looking at the returns of holding the original S&P500 companies from its start 65 years ago, with some alternative portfolios too.
Some of the particular decisions in the setup may or may not agree with grandpappy, I only skimmed, but it looks like the "survivor's portfolio" has returns in line with S&P500-with-replacement and even outperformed the newcomers slightly.
19 of the largest 20 companies were still around in some form when including mergers and acquisitions... however again this is 2004, and at least Kodak and Sears went out of business since then, IIRC?
Far stranger than going out of business, KODK became a meme stonk when Trump announced they were going to manufacture hydroxychloroquine causing it to 10X overnight back in early 2020. [1]
That is the thing.
What would the return have been if my grandpappy bought SAP500 65 years ago and kept those stocks he bought at the time until today? I have never seem such a number.
I mean if the loser stocks are rotated out it is hard to keep up with the index due to losses and transaction costs.