Beginning with the next issue, several Kitsap County business owners will be selecting a portfolio of five stocks that they feel have a good chance of beating the S&P 500 index by the end of this year. The competition will be hard pressed to beat the index, knowing that only approximately 20 percent of well-managed stock mutual funds typically beat the index in good times. However, in bad times well over 75 percent of well-managed stock mutual funds out perform the index.

The S&P 500 index is made up of 400 industrials, 40 utilities, 20 transportation and 40 financial issues. The index is constructed using market weights (stock price times shares outstanding) to provide a broad indicator of stock price movements. The selection of stocks, their relative weighting’s to reflect differences in the number of outstanding shares, and publication of the index itself are services of Standard and Poor’s Corporation, a financial advisory, security rating, and publishing firm. Since mid- 1989, the composition of the 500 stocks has been more flexible and the number of issues in each section has varies.

Watch for the next issue to see who are competitors are and what stocks they have chosen to out perform the index.