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Q What are the "one-time charges against earnings" that I see in company earnings reports?

- R.Y., St. Augustine, Fla.

A They're meant to reflect out-of-theordinary costs a company is bearing (for example, for closing plants, downsizing, writing off bad investments, etc.). The charges are meant to be removed from the company's earnings (in other words, their amount is added back), ostensibly to more accurately reflect the firm's operating performance. Imagine that Meteorite Insurance Inc. (ticker: HEDSUP) earns $10 million in a quarter, but it lays off many employees then, too, incurring significant severance payment costs. If these costs amounted to $2 million and were labeled as one-time charges, then the company would be suggesting that its business really earned $12 million in the quarter.

Q What's the S&P 500? - H.W., Seattle

A It's an index of 500 of America's biggest companies, as selected by the folks at Standard & Poor's. Though the U.S. stock market encompasses thousands of companies, these 500 together make up more than 75 percent of the market's value. The companies sport market capitalizations of at least $5 billion, and they include names such as Amazon.com, Anheuser- Busch, Boeing, Campbell Soup, Charles Schwab, Dell, ExxonMobil, FedEx, Ford, General Electric, Google, Harley-Davidson, Halliburton, Heinz, Hershey, Kellogg, Mattel, Merck, Microsoft, Nike, Procter & Gamble, Radio Shack, Southwest Airlines, Target, Whirlpool and Whole Foods Market. Companies removed from the list in the past year include Circuit City and Hilton Hotels, while those added include The Washington Post Co. and Abercrombie & Fitch.

You can invest in the S&P 500 easily via an index fund such as the low-cost Vanguard 500 Index. Learn more at www. fool.com/mutualfunds/mutualfunds.htm.

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