How to Invest in the S&P 500

The S&P 500 is one of the most well-known and popular stock indices for investors. Here's how to get in on the action.

Realize that you cannot invest directly in the index. Rather, you invest in a mutual fund that tracks the index.
Find mutual funds that track the S&P 500. You want to find funds that have the lowest expense ratios. Some of the best are VFINX, ETSPX, NINDX and USSPX. Remember, since these companies are tracking an index, they don't need to do much work, so a high expense ratio is not needed.
Open an account, preferably at the company that offers the mutual fund to save on transaction fees. Make sure that you get an account that has minimal or no fees. Some companies will allow you to avoid minimum balance fees by accepting electronic statements.
Buy the S&P 500 fund. Buy it in up markets and down markets and watch your investment grow over the long run.

Copyright 2009 by Michael Nehring