Consider these factors before making an investment when the S&P 500 moves into bull market territory

On Monday, the S&P 500 stock index reached a new all-time high.

This is a bull market under two definitions. The S&P 500 increased by over 20% from its lowest point in the previous year. It exceeded its previous high on Friday, marking the crossing of yet another bull market threshold.

The good news is that investing in a fund that mimics the S&P 500 index is an accessible method for investors who want to get in on the action.

There are about 500 large cap equity stocks in the S&P 500. Since each company’s weight in the index is determined by its market capitalization—the total value of all outstanding shares—it is known as a market cap-weighted index.

Apple, Microsoft, Amazon, Nvidia, Alphabet (having two share classes), Meta, Tesla, Berkshire Hathaway, and JPMorgan Chase are the top businesses ranked by weight.

At 28.9% of the index, information technology is the largest sector. The index reached its most recent highs thanks to a recent rally of well-known tech companies.

The balance of a portfolio will be more impacted by the ups and downs of the S&P 500 index the more exposed it is to those fluctuations.

Experts typically advise a 60/40 ratio between equities and bonds because of this. If an investor can tolerate greater risk over their time horizon, that might be increased to 70/30 or even 80/20.