Question
A person invested in the S&P500 index fund, he found: 1.Tesla to join S&P 500, spark epic index fund trade, by Noel Randewich in Reuter,
A person invested in the S&P500 index fund, he found:
1.Tesla to join S&P 500, spark epic index fund trade, by Noel Randewich in Reuter, 16 November 2020
2. Tesla shares surge to new high on S&P 500 inclusion by Michael Mackenzie, David Carnevali and Eric Platt in the Financial Times of the 18th of December 2020
Therefore, he believes that Tesla's pricing is too high and extremely risky, and its price may plummet in the near future and may damage the returns of its index funds.
Please give him some suggestions, which must include 5 aspects: the advantages of investing in S&P500 index fund instead of individual securities; how to calculate the S&P 500 index from its constituent securities; Pros and cons of Tesla entering the S&P500; Tesla's risk-benefit analysis; Systemic and special risk factors in the current stock market.
(If there is no way to include them all, please give detailed explanations separately or you can, but please do not copy the wrong answer. it is very important. )
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