The S&P 500: A century of lessons in patience, perspective, and playing the long game...

Steve Thompson, Founder, Atlas Bridge Wealth | Specialist advice for individuals and families moving to, living in, or leaving Portugal 🇵🇹

December 7, 2025

Whenever markets wobble, someone will always ask me the same question:

“Steve… is now really the right time to be investing?”

And almost every time, I point them back to one place: the S&P 500 — the clearest long-term mirror of the U.S. economy, and arguably the best teacher in investing.

But to really understand why the S&P 500 works, you need to understand where it came from, how it has survived every economic disaster imaginable, and why, despite all the noise, it continues to reward investors who stay the course.

So let’s make this simple, conversational, and real.

“So what even is the S&P 500, and where did it come from?”

Most people don’t know the S&P 500 has been evolving for a century.

It began in 1923

A small firm called Standard Statistics created a weekly index of 233 companies. Weekly, not real-time. One client laughed when I told her:

“Imagine only getting market updates once a week, Twitter would explode.”

1941: Two companies merge → Standard & Poor’s is born

They joined forces with Poor’s Publishing, giving us the name we still use today.

1957: The S&P 500 launches

Now tracking 500 of the biggest, most important companies listed on the NYSE and Nasdaq, it became the first truly modern stock market index.

It wasn’t just a list, it was a live snapshot of the U.S. economy.

How a company gets into the S&P 500 (and why it matters)

Unlike other indexes, the S&P 500 isn’t automatic. A committee chooses companies based on:

• Market cap (minimum ~$12.7 billion)

• Profitability

• Liquidity

• Sector representation

This means the index constantly updates itself, removing weak companies and replacing them with stronger ones.

A client once said:

“So it’s Darwin for stocks — only the strongest survive?”

Exactly.

This is why the S&P 500 doesn’t just reflect the economy, it evolves with it.

Why people call it the “health check” of the U.S. Economy

Because historically, when the S&P 500 goes up, the economy grows. When it falls, it’s usually because the economy is hurting.

That’s why everything shows up in its chart:

• The post-WWII boom

• The inflation crisis of the ’70s

• The bull market of the ’80s and ’90s

• The dot-com bubble

• The 2008 financial crisis

• The 2020 COVID crash

• The inflation/interest rate shocks of 2022–23

One client once said:

“It’s basically a lie detector test for investor confidence.”

He wasn’t wrong.

Where the S&P 500 has been, and what it teaches us

Let’s walk through its history, not in technical jargon, but in the way clients discuss it in meetings.

The 1970s: Inflation punched everyone in the face

Oil shocks. Stagflation. Recession. From 1969 to 1981, the index drifted downwards.

1982–2000: One of the greatest bull markets ever recorded

Falling interest rates, globalisation, cheap commodities, and massive technological change.

The S&P 500 soared.

This was the era when long-term investors quietly built enormous wealth.

2000–2002: The tech bubble bursts

People were buying anything with “.com” on the end. When reality arrived, the Nasdaq collapsed.

The S&P fell too, but far less, and recovered by 2007.

A client told me recently:

“It’s actually comforting to see that even the ‘big crash of my lifetime’ looks tiny on a long-term chart.”

Perspective is everything.

2008–2009: The Financial Crisis

Housing collapsed. Banks failed. Confidence evaporated. The S&P 500 suffered its biggest drop since WWII.

But here’s the part investors forget:

By March 2013, it had fully recovered, and then it ran for nearly 10 years.

2020: COVID — The fastest crash in history

In just over a month, the index fell 34%.

Yet by August, it had recovered. By the end of 2021, it hit new all-time highs above 4,700.

That recovery required only one thing from investors:

Not panicking. (Which is harder than it sounds.)

As one of my clients said:

“Steve, I thought the world was ending… and my portfolio doubled instead.”

2022–2023: Inflation fights back

Interest rates spiked from 0.08% to 4.65%. Supply chains broke. War in Ukraine added fuel.

The S&P 500 fell....again.

But like every cycle before it, this was a moment, not a destination.

Why the S&P 500 Rewards Long-Term Investors

Because it is built for resilience.

Because weak companies fall out, and strong companies take their place.

Because it's weighted by market cap — meaning the winners naturally matter more over time.

Because the U.S. economy, for all its flaws, has an extraordinary ability to innovate and reinvent.

But most importantly:

Because compounding needs time, not timing.

A client said something last year that stuck with me:

“I’ve realised that investing isn’t about predicting the future — it’s about staying invested long enough for the future to stop surprising you.”

That’s exactly it.

So… is the S&P 500 still good for investors today?

Generally, yes, the S&P 500 can be an excellent long-term investment, but only if your strategy matches your time horizon.

Short-term investors are often tempted to time the market, jumping in and out based on headlines or fear. But history shows that this approach usually backfires. Mistiming even a handful of days can erase years of potential returns.

Long-term investors, on the other hand, benefit from what the S&P 500 is designed to do:

• Give you exposure to the strongest companies in the U.S.

• Continuously refresh itself by removing weaker businesses and adding leaders of the future

• Recover from every crisis on record — often faster than expected

• Allow compounding to quietly work in your favour year after year

The real advantage comes not from predicting the right moment to invest… but from remaining invested long enough for the index to do what it’s done for nearly 70 years: grow, adapt, and reward patience.

You can’t invest directly in the S&P 500, but you can invest in low-cost ETFs and funds that track it, and for most people, that’s the simplest and most effective way to tap into decades of U.S. economic growth.

The bottom line...

The S&P 500 isn’t just a stock index. It’s a story of resilience, a reflection of human progress, and a reminder that markets reward patience, not perfection.

If history teaches us anything, it’s this:

📌 Trying to time the markets rarely works. 

📌 Staying invested has worked for nearly 100 years. 

📌 The S&P 500 is less about excitement… and more about endurance.

Or, as a client said in a review meeting not long ago:

“I finally get it, the S&P 500 doesn’t care about my nerves. It cares about my time horizon.”

And that, right there, is the essence of good investing.