I've done quite a bit of reading about index funds and I would like to invest in the s&p 500. How do I buy it?

Question

Every time that I go to an investing site all they show is mutual funds, and I am presented with a long list of mutual funds to pick from. Is there a way to just buy a share of the S&P 500?

Sorry, I know nothing about investing.

Answer 1

Regarding Traderb55: 0.18% is in an outstanding expense ratio (for the Index 500), but it hardly constitutes "no expenses."

Personally, I'd save up enough to make the commission worth it and purchase a Spyder (SPDR ETF). You get the S&P index with truly no expenses. Also, you can place a stop loss on it that you can't with a mutual fund.

Better yet, see a financial advisor who can design the proper plan with YOUR objectives in mind.

Answer 2

No, the S&P is an index or a measurement, so you just can't go and buy a share in it. S&P index funds are mutual funds that try to invest in the top 500 S&P companies with the same weightings that those companies are given in the S&P index. First, try the links below from the Motley Fool site, which explain it all much better than I can. These links will also lead you to lots of other links about index funds, including the S&P 500 ones.

http://www.fool.com/mutualfunds/indexfunds/indexfunds01.htm

http://www.fool.com/school/indices/sp500.htm

Since you don't know much about investing, however, I recommend that you read a couple of good financial planning books first. I think that Suze Orman's books, for example, give wise advice. You need to take a look at your total financial picture, make sure you have enough emergency cash etc. and understand what you're investing in before you lay your cash on the line.

Answer 3

You cannot just buy into the S&P 500 as it is just an index as established by Standard and Poor's. You can however buy into a fund that tracks the S&P 500. Assuming you are investing less than $10,000 and are going to invest some each month a mutual fund is the best way to go, the cheapest is from Vanguard and is the S&P 500 index. It has a $3,000 minimum and charges only 0.18% in expenses. If you are investing over $10K, Fidelity has a cheaper one that charges only 0.10% per year in expenses. SInce index funds have to follow that index, all of their returns are going to be similar and you want the cheapest fund. If you are going to invest only a lump sum an ETF would be the cheaper way to go and a S&P spyder would be the best way. Spyders trade under the ticker symbol (SPY) on the amex exchange.

Answer 4

The stock to buy is the "SPY" on the AMEX, and this is like a mutual fund of the stocks contained in the S&P 500 Index. It is also known as "Spiders".

Mutual funds are a different animal than a stock. The SPY is like a mutual fund, which is invested only in the S&P 500 stocks, in the same ratio. Since it does not require much management, it is very efficient. It is called an electronic traded fund (ETF).

Regular mutual funds usually buy stocks of companies the fund managers think will outperform the market. Since there is more buying and selling than an ETF, the management fees are slightly higher, but the returns of a good mutual fund can make-up for that.

Whatever you invest in, make sure you get training on the stock market, or you will loose money. See this page for a review of courses: http://online-investing-review.com/blog/online-stock-trading/

Answer 5

SPY (SPDRs) is an ETF that follows very acurately the S&P 500.
It's optionable.

Index ETFs are the very basic step of investing, you need to know which way the market is heading, both short and long term, and invest invest only in the direction of the long term (months to years).

Be aware of mutual funds during bearish (down) markets, almost all lose money. During bull markets they are OK if you dont have time to learn about stocks. By the way 80% of all mutual funds underperform the S&P 500.

Answer 6

I would recommend an Index Mutual Fund which invests in the S&P 500.

Vanguard Index 500 fund is great, there are no expenses.

go to www.vanguard.com to open up an account

Answer 7

An index fund and the S&P500 are two different things. The index fund is a mix or ratio of the companies activities of the top 500 companies of the Standard and Poors.

Answer 8

in case your decision is between those 2, pass with the finished marketplace index--it is more beneficial various and incorporates small cap stocks (which have a higher go back over the years). notwithstanding, I actual have a forefront IRA and did wide analyze and questioning previously I chosen money. i love the objective Retirement 2045 (or they have 2050 now too i imagine) because it incorporates international stocks and bonds and adjusts allocation immediately as I age. I also fairly like the LifeStrategy boom fund it truly is similiar yet would not replace allocation over the years. The fee ratios are a touch higher, yet you save through no longer having to open 3-4 diverse money to fulfill all of your needs (each and every index fund will fee $10/twelve months until eventually you've over $10,000 in each and every of them). Plus you get the added diversification of bonds and international and sector money.

Answer 9

I agree, Vanguard is one of the best funds to buy if you are after an index fund. Their management fees are very cheap compared to others doing the same thing.

Answer 10

Go to Vanguard and buy VFINX. This is one of the best S&P 500 mutual funds you can buy without paying a commission.

https://flagship.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0040&FundIntExt=INT

Good luck!