What Are Stocks? And How To Invest in the S&P 500

Buying Stocks

Buying stock is a great way to have an ownership stake in a business without buying a company altogether. Doing this can grow your saved money while you are at your day job. (It’s called “investing”)

Buying Index Funds

While buying individual stocks may be profitable, there can also be a higher amount of risk than investing in a wider range of investments.

What is an index fund and how is it different from owning stock?

An index fund a mutual fund whose holdings exactly match that of a stock index. Unlike mutual funds that are actively managed according to various strategies, the index fund requires very little management.

 

Why Not Buy Individual Stocks?

This is not to say you can’t do well buying individual stocks, you certainly can. But I think you need to “invest” more time into understanding the markets and learning how to pick good stocks.

What’s the Easiest Way to Invest in the “S&P 500”?

The easiest way to invest in the S&P 500 basket of stocks would be to buy shares of the SPY ETF.

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Learning how to invest in S&P 500 stocks and index funds is an important part of the process.  Since its first introduction in 1957, the S&P 500 has been a measuring stick for the health of the stock market in the United States.

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