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19 Oct 2018

Market Metrics: S&P 500 Index

FAANG stocks (Facebook, Amazon, Apple, Netflix, Google) are part of the S&P 500 Information Technology Index which is one of 11 sectors that make up the S&P 500 Index.

To understand why the S&P 500 Index reached record levels this year you need to go no further than to look at the performance of the S&P 500 Information Technology Index which is up 600% since the 2008 Global Financial Crisis.

The current price to earnings ratio for the FAANG stocks are stretched but not at hallucinating levels apart from Amazon and Netflix.

Now it is very possible that these lofty valuations could persist for some time further before this second longest bull market in US history comes to an end.

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