The makeup of the S&P 500 is constantly changing 🔀

Frequent additions and subtractions make index investing more active than you might assume 🤯

Companies constantly vie for position in the S&P 500. (Screenshot from “Squid Game”)

Billionaire investor Warren Buffett often advises his followers to invest in an S&P 500 index fund.

Historically, it’s been pretty good advice. Most professional stock pickers underperform the S&P. And the index often offers exposure to the handful of names delivering the outsized returns responsible for market-beating performance.

This style of investing is often referred to as passive investing, because it involves buying and holding securities for a long period of time with very little trading.

But it’s critically important for investors to understand that buying an S&P 500 index fund is not the same thing as buying and sitting on a static set of 500 stocks.