How Does a Person Buy Stock in the S&P 500 Index?


Quick Answer

While it is not possible to buy stock in the S&P 500 index directly, purchasing shares in an index fund through an investment vehicle is the best way to get a piece of the action, according to the Motley Fool. These diverse funds are a safe and reliable way to grow your money.

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Full Answer

The S&P 500 Index tracks the performance of the stocks of 500 large companies traded on the NASDAQ or New York Stock Exchange. Many investment firms create index funds that attempt to replicate performance of the S&P 500 Index exactly. To purchase shares in these index funds, you need an investment vehicle such as a retirement or brokerage account. If your workplace offers a retirement account, look through your investment choices to see if you have an index fund available to you. The low expense ratio these funds carry improves the long-term gains in your account as you ready for retirement.

If your place of employment does not offer a retirement account, consider opening an Individual Retirement Account through your local bank to invest in an S&P 500 index fund. If you have already maxed out your retirement accounts and still want to invest, open a taxable brokerage account. Most brokerage accounts require a minimum balance to open. Once you have enough money set aside to open an account, get in touch with your bank of choice, and find an index fund that works for you.

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