How to Invest in the S&P 500 in 2024 - NerdWallet (2024)

The S&P 500 is a well-known stock market index, and an index is really just a list of companies. You can't directly invest in a stock market index (considering it's just a list), but you can invest in index funds and exchange-traded funds (ETFs) that contain the same companies listed in the S&P 500. Here's how to do it.

The easiest way to invest in the S&P 500

The simplest way to invest in the index is through S&P 500 index funds or ETFs that replicate the index. You can purchase these in a taxable brokerage account, or if you're investing for retirement, in a 401(k) or IRA, which come with added tax benefits. You can also invest in the individual companies found in the S&P 500.

» See the with the lowest fees or the .

Whether you want to buy an index fund, ETF or individual stocks, the first step is to open an investment account.

Opening an investment account

If you don't already have a brokerage account, you'll need to open one to buy investments. You can use the money you deposit into the brokerage account to purchase S&P 500 stocks or funds, which will then be held within that account.

» Learn more: What is a brokerage account and how to open one

If your ultimate goal is investing for retirement, consider investing in the S&P 500 through a 401(k) or IRA, rather than a taxable brokerage account.

» Learn more: 401(k) vs. IRA: How to Choose

Choosing your investments

Once you've opened an investment account, you'll need to decide: Do you want to invest in individual stocks included in the S&P 500 or a fund that is representative of most of the index? Investing in an S&P 500 fund can instantly diversify your portfolio and is generally considered less risky. S&P 500 index funds or ETFs will track the performance of the S&P 500, which means when the S&P 500 does well, your investment will, too. (The opposite is also true, of course.)

Once you've decided, you can simply follow the instructions within your brokerage account to purchase the S&P 500 investment(s) you've decided to buy.

» Learn more about some of the

S&P 500 index (SPX) today

This chart shows the performance of the S&P 500 index (SPX) today compared to the previous trading day's close.

What does it mean to invest in the S&P 500?

The is made up of about 500 large public U.S. companies. It is one of the stock market indexes often considered a proxy for the overall health of the U.S. stock market.

Contrary to popular belief, the stocks forming the index are not the 500 biggest U.S. companies, but they are arguably some of the most important U.S. companies: These stocks represent about 80% of the total U.S. stock market’s value.

The S&P 500 weights the stocks by market capitalization, or total market value (the number of outstanding shares multiplied by the stock's current market price). The larger the company, the greater its influence on the index.


How to Invest in the S&P 500 in 2024 - NerdWallet (1)


Charles Schwab
Interactive Brokers IBKR Lite

NerdWallet rating


NerdWallet rating


NerdWallet rating




per online equity trade



per trade for online U.S. stocks and ETFs



per trade

Account minimum


Account minimum


Account minimum




no promotion available at this time



no promotion available at this time



no promotion available at this time

Learn More
Learn More
Learn More

Should I buy stocks when markets are at all-time highs?

Three major stock market indexes set new records in 2024. And after several years of market volatility, a pandemic and geopolitical instability, it can feel like a scary time to invest, whether at the top or bottom of the market.

Tracey Dean, a certified financial planner in Salt Lake City, Utah, reminds clients not to worry about investing timing and whether they're entering the market at the top or bottom. Instead, Dean helps clients invest long-term and learn more about diversification, or spreading your dollars across a range of investments to reduce the risk you’re exposed to.

If you’ve got a long time until you need the money you’re investing (say, 20 or 30 years), “don't worry that we're at the top of the market right now,” Dean says. “They'll be another top or there'll be a bottom. That's the ebb and flow of and volatility of the markets."

No matter what’s happening in the market, now is a good time to invest if you’re investing for the long term.

» Learn more about whether to buy stocks amid uncertainty

How much does it cost to invest in the S&P 500?

If you want to invest in the S&P 500, there are a few costs to consider.

If you are investing in an S&P 500 index fund:

  • If your index fund has no minimum, you can usually purchase in any dollar amount. If your index fund has a minimum, then you have to purchase at least the minimum amount.

  • If your index fund has an expense ratio, you'll be charged that as a fee. An expense ratio is an annual fee expressed as a percentage of your investment. For example, if you invest $100, and your fund has an expense ratio of 0.04%, you'll pay an annual fee of $0.04.

If you are investing in an S&P 500 ETF:

  • ETFs trade similarly to stocks and have a share price. Depending on your broker, you will either need to pay the full share price or you can buy fractional shares for any dollar amount.

  • Similarly to index funds, ETFs often have expense ratios, so make sure you see how much you'd be paying in fees to invest in a given ETF.

If you are investing in a stock within the S&P 500 index:

  • Stock costs vary significantly. Some stocks in the S&P 500 cost under $100, and others cost $500 a share or more. Be sure to look at each stock's share price before you make a decision to buy.

Top 20 performers in the S&P 500 index

This chart shows the top-performing stocks in the S&P 500, based on YTD returns.

Data is from Google Finance and may be delayed. For informational purposes only.

» Learn more about the

Should I invest in an S&P 500 index fund or S&P 500 ETF?

While all S&P 500 funds track the holdings of this index, an investor must consider whether using an index mutual fund (a passively managed mutual fund) or an ETF makes the most sense for them. There are several differences to consider — for example, ETFs can be bought and sold whenever the stock market is open, while mutual funds can only be bought and sold at a set price point at the end of each trading day.

The good news is that there are solid S&P 500 options in each category, and all of these products leverage the diversity of the index itself. Compare index funds versus ETFs to decide which one is right for you.

» Ready to start investing? See our picks of best brokerages for fund investors

Track your finances all in one place

Find ways to invest more by tracking your income and net worth on NerdWallet.


How to Invest in the S&P 500 in 2024 - NerdWallet (5)

Are there drawbacks to investing in the S&P 500?

While an S&P 500 ETF or index fund may be a worthwhile investment, there are caveats to consider.

Overall diversification

The S&P 500 consists of only large-cap U.S. stocks. Portfolio diversification encompasses buying mid- and small-cap companies along with large caps; allocating funds to international companies along with domestic ones; and including bonds, cash and potentially other asset classes with stocks.

Kevin Koehler, a chartered financial analyst based in Los Angeles, also notes drawbacks in the S&P 500 related to its market-cap weighting.

“As passive investing increases, investors are continually investing in S&P 500 funds, which has contributed to a ‘rich get richer’ problem, where the largest stocks are getting larger due to S&P 500 investing, rather than individual stock investing,” Koehler says. “This can lead to higher volatility, as active managers sell an individual stock on top of index funds selling a portion. The market could continuously be overvalued compared to its underlying value.”

But relative to the downsides of many investment types, the flaws of S&P 500 funds seem relatively minor, especially when used as a part of your overall portfolio and held for the longer term.

» Learn more about investment diversification

Neither the author nor editor held positions in the aforementioned investments at the time of publication.

How to Invest in the S&P 500 in 2024 - NerdWallet (2024)


How to Invest in the S&P 500 in 2024 - NerdWallet? ›

The estimates from strategists put the median target for the S&P 500 at 5,200 by the end of 2024, implying a decline of less than 1% from Friday's level, according to MarketWatch calculations. Heading into 2024, the median target was around 5,000 (see table below).

What will the S&P be at the end of 2024? ›

The estimates from strategists put the median target for the S&P 500 at 5,200 by the end of 2024, implying a decline of less than 1% from Friday's level, according to MarketWatch calculations. Heading into 2024, the median target was around 5,000 (see table below).

Which index fund is best in 2024? ›

Best Index Funds in india for 2024
Index FundMinimum SIP Investment3-year return
Nippon India Nifty Small Cap 250 Index Fund Direct - GrowthRs 1,00033.50%
DSP Nifty 50 Equal Weight Index Fund Direct - GrowthRs 10022.94%
Canara Robeco Small Cap Fund Direct - GrowthRs 1,00037.33%
2 more rows

How to invest in the S&P 500 for beginners? ›

How to invest in an S&P 500 index fund
  1. Find your S&P 500 index fund. It's actually easy to find an S&P 500 index fund, even if you're just starting to invest. ...
  2. Go to your investing account or open a new one. ...
  3. Determine how much you can afford to invest. ...
  4. Buy the index fund.
Apr 3, 2024

What is the return of the S&P 500 after 5 years? ›

S&P 500 5 Year Return is at 70.94%, compared to 85.38% last month and 57.45% last year. This is higher than the long term average of 45.28%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.

How much will the S&P 500 be worth in 2025? ›

That suggests the S&P 500 could trade to 6,000 by August 2025, and to as high as 6,150 by November 2025. But in the short-term, amid the ongoing weakness in stocks, Suttmeier said investors should keep an eye on potential support levels for the S&P 500 at 5,000 as well as a range from 4,600 to 4,800.

What is the best investment in 2024? ›

Overview: Best investments in 2024
  1. High-yield savings accounts. Overview: A high-yield online savings account pays you interest on your cash balance. ...
  2. Long-term certificates of deposit. ...
  3. Long-term corporate bond funds. ...
  4. Dividend stock funds. ...
  5. Value stock funds. ...
  6. Small-cap stock funds. ...
  7. REIT index funds.

Is now a good time to invest in the S&P 500? ›

The S&P 500 has hit 20 intraday highs in 2024. As stocks climb higher many stock valuations may be stretched beyond their intrinsic value. But it's still possible to find great investment opportunities as the stock market hits new all-time highs.

Will 2024 be a good year for the stock market? ›

Through Thursday, the venerable index had returned 3.7% for 2024, with dividends reinvested. The S&P 500 SPX was down only slightly for the day and had returned 11.1% for 2024. Now take a look at financial performance that can drive stocks higher over the long term. The S&P 500 is weighted by market capitalization.

Is spy better than voo? ›

Over the long run, they do compound—those fee differences—and investors have been putting a lot more money into VOO versus SPY. That is the reason why we view VOO slightly better than SPY. And that is just the basic approach, which is the lower the investor can pay, the better the investment is.

Should I invest $10,000 in S&P 500? ›

Assuming an average annual return rate of about 10% (a typical historical average), a $10,000 investment in the S&P 500 could potentially grow to approximately $25,937 over 10 years.

Should I just put my money in S&P 500? ›

A strategy even stock-picking experts recommend

An S&P 500 index fund could lead to a lot of retirement wealth. If you're still not quite convinced, consider that investing great Warren Buffett has long recommended that individual investors fall back on the S&P 500 to grow their nest eggs.

What is the minimum deposit for S&P 500? ›

What is the minimum investment for the S&P 500? For an S&P 500 index fund, many come with no minimum investment. For an S&P 500 ETF, you might need to pay the full price of a single share, which is generally upwards of $100—but some robo-advisors like Stash offer fractional shares for as little as $5.

What is the 10 year return on the S&P 500? ›

Average returns
PeriodAverage annualised returnTotal return
Last year25.7%25.7%
Last 5 years14.2%94.5%
Last 10 years15.3%316.2%
Last 20 years10.6%651.5%

What are the 5 top performing US stocks for 2024 year to date? ›

2024's 10 Best-Performing Stocks
Stock2024 Return Through April 30
Super Micro Computer Inc. (SMCI)202.1%
Alpine Immune Sciences Inc. (ALPN)238.9%
Viking Therapeutics Inc. (VKTX)327.6%
Janux Therapeutics Inc. (JANX)431.2%
6 more rows
May 3, 2024

Does S&P 500 ETF pay dividends? ›

VOO dividend yield as of May 2024

At the last update on April 26, the Vanguard S&P 500 ETF had a dividend yield of 1.37%. But it's important to note that yields can fluctuate with market prices.

What are the predictions for the 2024 stock market? ›

The Big Money bulls forecast that the Dow Jones Industrial Average will end 2024 at about 41,231, 9% higher than current levels. Market optimists had a mean forecast of 5461 for the S&P 500 and 17,143 for the Nasdaq Composite —up 9% and 10%, respectively, from where the indexes were trading on May 1.

What is the stock market prediction for the next 5 years? ›

The updated Dow Jones price prediction for the next 5 years is for the index to trade around 45,000 points. Long Forecast predicts Dow Jones to trade above 40,000 points in the second half of 2024 and and advance up to 44,000 points by the end of the year. This is the most bullish Dow Jones forecast for 2024.

How much will the S&P 500 be worth in 2030? ›

Stock market forecast for the next decade
5 more rows
Apr 26, 2024

What is the expected return of the stock market in the next 10 years? ›

It's all about valuation

It analyzes historical data to try and predict what returns will be over the next 10 years. According to this model, U.S. equities are set to produce annualized returns of just 4.7% in the next decade. That's a huge slowdown from the past decade.

Top Articles
Latest Posts
Article information

Author: Lakeisha Bayer VM

Last Updated:

Views: 5920

Rating: 4.9 / 5 (49 voted)

Reviews: 80% of readers found this page helpful

Author information

Name: Lakeisha Bayer VM

Birthday: 1997-10-17

Address: Suite 835 34136 Adrian Mountains, Floydton, UT 81036

Phone: +3571527672278

Job: Manufacturing Agent

Hobby: Skimboarding, Photography, Roller skating, Knife making, Paintball, Embroidery, Gunsmithing

Introduction: My name is Lakeisha Bayer VM, I am a brainy, kind, enchanting, healthy, lovely, clean, witty person who loves writing and wants to share my knowledge and understanding with you.