Tomahawk, WI 8/05/2013 (Basicsmedia) – SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has net assets worth a massive $133.34 billion. This in itself makes it one of the largest ETFs in history. It doesn’t generate as much publicity as the Dow, but if you look at it closely, you will notice that the fund is one of the most impressive performers. The fund was incepted on Jan 21, 1993 and it has been growing ever since to a point where it recently, together with others, posted record transactions. It’s important to ask about the factors which are lending a helping hand to SPY thus leading to its wonderful performance, and this is what this article seeks to discover.

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Courtesy of www.rickferri.com

Which Factors are Aiding SPY’s Better Performance?

SPY has been a major beneficiary of the recovery which has been witnessed by a wide section of the economy. This is after a period of time when it went through a very depressing moment. As recently as 2009, this market bottomed out. However, as the economy recovers, the situation is changing and this is leading many to notice that things are really changing. Companies are enjoying a period where they are able to make profits just like they used to. Companies are now able to hire more staff in larger numbers and the housing market is also enjoying a better period of recovery.

Secondly, The Fed has also lent a great helping hand to this entire process. It has done this by keeping the interest rates near bottom figures and this has been of great help and assistance to the whole project. These low rates have helped the central bank to convince people about the need of getting their money out of accounts which don’t pay them back as much as they would like. Instead, people are now being encouraged to invest their monies in stocks and other forms of investment which pay them much better than what they would even have imagined.

Should I Be Concerned Over What happens to SPY?

SPY may have recorded some wonderful figures since the financial crisis of 2008, but a close inspection of the same would reveal that this is yet to reach the peaks. The whole scenario is better appreciated once you take a look at what the inflation rates are at the moment. Many people may not see the need of getting concerned with SPY and what happens to it. However, if you are careful enough, you will notice that it is actually tied in some way to the U.S stock mutual fund which is probably part of your retirement account. This is something which affects you, whether you realize it or not.

Professional investors pay a lot of attention to indexes, and the SPY is one of those which they trust a great deal. It provides one of the main barometers which can tell professional investors more about a certain company’s stock, which they are interested in, thus enabling them to make decisions which are more informed and based on actual facts.  I have learnt to pay close attention to SPY and the entire world of SPDR S&P 500 to give me the ability to make better choices and decisions. Start using it today and see how you will develop your abilities as an informed investor.

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