Buy into the S&P 500 through an ETF.
The S&P 500 Stock Index consists of the 500 largest companies in the U.S. The index is widely followed and used as an indicator for the overall value and direction of the U.S. stock market. Investors who want to match the returns of the U.S. market and S&P 500 index can do so by investing in a fund that matches the components and weightings of the S&P 500.
Instructions
1. Open an account with an online discount stock broker if you do not already have an account. The Smart Money 2010 Broker Survey gives their rankings of the top online brokers. According to the survey, Fidelity, E-Trade and TD Ameritrade are the top choices.
2. Fund the account with the amount you want to invest in the S&P 500 stock index. You can send money to an online broker by wire transfer, electronic ACH deposit or mail a check. The broker's website will have directions for sending in money.
3. Look up the current share price for the SPDR S&P 500 ETF, symbol SPY. SPY is the largest and oldest exchange traded fund and matches the performance of the S&P 500 stock index.
4. Calculate the number of shares to purchase by dividing your amount to invest by the current share price of SPY. ETF shares are sold only as whole shares, so round your results down to the next whole number if the result is a fraction.
5. Buy the calculated number of SPY shares using the stock trading screen of your online brokerage account. To place an order, you will enter the stock symbol SPY and the number of shares. The order will be filled at the current market share price.
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