If I want to invest $4000 in the S&P 500 stocks (which is diversified and non-risk), how do I do this?

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    What do you mean "non-risk"? Investing in the S&P 500 most definitely carries risk. Commented Jun 5, 2016 at 3:35

2 Answers 2


The S&P 500 is a stock market index, which is a list of 500 stocks from the largest companies in America.

You could open a brokerage account with a broker and buy shares in each of these companies, but the easiest, least expensive way to invest in all these stocks is to invest in an S&P 500 index mutual fund.

Inside an index mutual fund, your money will be pooled together with everyone else in the fund to purchase all the stocks in the index. These types of funds are very low expense compared to managed mutual funds. Most mutual fund companies have an S&P 500 index fund; two examples are Vanguard and Fidelity. The minimum investment in most of these mutual funds is low enough that you will be able to open an account with your $4000.

Something you need to keep in mind, however: investing in any stock mutual fund is not non-risk. It's not even low-risk, really. It is very possible to lose money by investing in the stock market. An S&P 500 index fund is diversified in the sense that you have money in lots of different stocks, but it is also not diversified, in a sense, because it is all in large cap American stocks. Before investing in the stock market, you should have a goal for the money you are investing. If you are investing for something several years away, an index fund can be a good place to invest, but if you will need this money within the next few years, the stock market might be too risky for you.

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    About your "keep in mind" - It's also a risk to not invest your money anywhere. If I had $1000 in 1950 and I hadn't invested them I would still have $1000. If I invested them in literally anything I think I would have at least $10,000 - heck, that's just the inflation. Some people don't realize that money itself can lose its value over time and a Big Mac's price isn't constant :) Commented Jun 5, 2016 at 18:22
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    @BenjaminGruenbaum Agreed. It all depends on how long you are investing. An S&P 500 index fund is high risk if you hold it for only a year, and low risk if you hold it for decades.
    – Ben Miller
    Commented Jun 5, 2016 at 19:50
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    @BenjaminGruenbaum: literally anything? There are lots of investments, past and present, where your money can vanish. Commented Jun 6, 2016 at 5:06
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    The key word here is index fund. When choosing an index mutual fund you should also look for the word unmanaged: that means the fund does not "benefit" from the expensive ministrations of a "wizard" picking stocks. Because it's an index fund the stocks are already picked. Funds of this kind compete with one another on how low their fees are. Never put your money into a fund like this with upfront fees.
    – O. Jones
    Commented Jun 6, 2016 at 10:56
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    @PeterK. It's semantics, perhaps, but I would say yes, they are. See this answer for a discussion on what distinguishes an ETF from a traditional mutual fund.
    – Ben Miller
    Commented May 7, 2017 at 12:20

Buy the ETF with ticker "SPY". This will give you exposure to exactly the S&P 500 stocks, This is similar to the mutual fund suggestion by Ben Miller, except that the ETF has several advantages over mutual funds, especially as regards taxes. You can find information on the difference between ETF and mutual fund in other questions on this site or by searching the web.

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    For what it's worth, SPY currently has a .09% expense, vs VOO at .05%. Commented Jun 5, 2016 at 10:41
  • JoeTaxpayer makes a good point regarding the expense ratio difference. That said, if you don't have the amount needed for the minimum investment, ETFs do let you buy the S&P 500 in smaller amounts. Commented Jun 5, 2016 at 13:15
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    That the ETF has advantages over the corresponding mutual fund as far as taxes are concerned might be a truism but is close to a distinction without a difference as far as an investment of $4000 is concerned. Commented Jun 5, 2016 at 13:52
  • @JoeTaxpayer Strictly speaking, VOO does NOT do what the OP asked. SPY is a unit investment trust, which must replicate the holdings of its index. VOO attempts to track the S&P 500, but does not necessarily hold the stocks, so there's different risk there. In practice, it has tracked well, but it doesn't have to be that way in the future. See, e.g., here (marketwatch.com/story/…), which also discusses IVV.
    – user32479
    Commented Jun 5, 2016 at 16:14
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    'ETF with ticker "SPY"' - The OP's wording (and the fact that they asked it in the first place) suggests that they would have no idea what any of that would mean.
    – icc97
    Commented Jun 5, 2016 at 19:54

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