The S&P 500 has returned an average of roughly 10% per year over the long run. Warren Buffett has repeatedly recommended it for everyday investors. So how do you actually buy it?
You cannot buy "the S&P 500" directly. It is an index, not a fund. But there are three practical ways to invest in it, each with slightly different tradeoffs.
Investing involves risk, including possible loss of principal. Past performance does not guarantee future results. This article is for educational purposes only and is not financial advice.
What You'll Need
Before choosing a path, make sure you have:
- A brokerage or fund account (where you actually invest)
- A linked bank account to fund purchases
- A decision on which vehicle to use: ETF, index mutual fund, or direct indexing
Step 1: Understand Your Three Options
Path 1: S&P 500 ETFs
ETFs (exchange-traded funds) trade on a stock exchange just like individual stocks. They track the S&P 500 by holding all 500 companies in proportion to their market size.
Popular S&P 500 ETFs include:
- VOO (Vanguard S&P 500 ETF) - expense ratio: 0.03%
- SPY (SPDR S&P 500 ETF Trust) - expense ratio: 0.0945%, highest liquidity
- IVV (iShares Core S&P 500 ETF) - expense ratio: 0.03%
A side-by-side look at SPY vs VOO can help you decide which fund fits your investing style before you place your first order.
ETFs can be bought for as little as the price of one share, or in fractional amounts on platforms that support it.
Path 2: S&P 500 Index Mutual Funds
Index mutual funds work like ETFs but trade only once per day at market close. They often have minimum investment requirements.
Popular options:
- VFIAX (Vanguard 500 Index Fund Admiral Shares) - $3,000 minimum, 0.04% expense ratio
- FXAIX (Fidelity 500 Index Fund) - no minimum, 0.015% expense ratio, one of the lowest-cost options available
For a deeper comparison, see FSKAX vs FXAIX to understand the difference between Fidelity's total market and S&P 500 funds.
Mutual funds are often accessed through a fund company (Vanguard, Fidelity) or through a brokerage account.
Path 3: Buy ETFs Through a Brokerage
This is the most flexible and lowest-barrier approach for most beginners. Open a brokerage account, fund it, and buy shares of VOO, SPY, or IVV just like you would buy any stock.
Robinhood lets you buy S&P 500 ETFs commission-free with fractional shares, so you can invest any dollar amount rather than needing enough for a full share of VOO (which trades around $500+ as of 2026).
Robinhood
Robinhood
Robinhood is a trading platform that brings stocks, ETFs, options, futures, prediction markets, crypto, and retirement accounts together in one app.
Standout feature
One platform for stocks, ETFs, options, futures, prediction markets, and crypto
Fees
$0 commission on stocks, ETFs, and options.
Pros
Zero-commission trading on stocks, ETFs, and options
Cons
Best perks (high APY, lower margin rates) require Gold subscription ($5/month)
Step 2: Open and Fund Your Account
For ETF investing, the steps are:
- Download the brokerage app or visit the website.
- Create an account with your personal information and Social Security number.
- Link your bank account.
- Transfer funds (ACH transfers are free but take 1 to 3 business days; many platforms offer instant buying power).
For mutual fund investing through Fidelity or Vanguard, the process is similar but you may need to meet minimum investment amounts.
Step 3: Search for Your ETF or Fund
In a brokerage account, search for the ticker symbol:
- Type "VOO" or "SPY" or "IVV" in the search bar.
- Pull up the fund details page to see the current price, expense ratio, and holdings.
Step 4: Place Your Order
For ETFs:
- Tap "Buy."
- Enter a dollar amount or number of shares.
- Choose market order (executes now at current price) or limit order (sets a maximum price).
- Review and confirm.
For fractional shares on Robinhood, you can invest as little as $1 into VOO even if a full share costs hundreds of dollars.
Step 5: Set Up Regular Contributions (Optional but Recommended)
The most effective strategy for most long-term investors is consistent investing over time, sometimes called dollar-cost averaging. You invest a set amount on a regular schedule regardless of what the market is doing.
Many platforms let you automate this. Setting a weekly or monthly auto-invest into an S&P 500 ETF removes the emotional decision-making from the process. For a curated breakdown of the top options, see the guide to the best S&P 500 ETF picks.
ETF vs. Index Fund: Which Is Better?
For most beginners using a brokerage account, ETFs like VOO or IVV are simpler. They have no minimums, trade in real time, and are available on every major platform.
If you invest directly through Fidelity or Vanguard and prefer end-of-day pricing with automatic reinvestment, an index mutual fund like FXAIX or VFIAX works just as well.
The cost differences between top ETFs and top index funds are minimal. The best choice is often just whichever is easiest to access through your current account.
Frequently Asked Questions
Can I buy the S&P 500 in a Roth IRA?
Yes, and this is a very common strategy. You can hold S&P 500 ETFs or index funds inside a Roth IRA. Any gains grow tax-free, and qualified withdrawals in retirement are also tax-free. This combination, S&P 500 exposure inside a Roth IRA, is often cited as a foundational long-term investing approach. See the full Roth IRA guide for more on contribution limits and eligibility.
What is the minimum to start investing in the S&P 500?
With fractional share ETF investing on platforms like Robinhood, you can start with as little as $1. Index mutual funds from Fidelity (FXAIX) also have no minimum. The more traditional Vanguard mutual fund (VFIAX) requires a $3,000 minimum. For a broader S&P 500 option, the S&P 500 index fund guide covers all the major vehicles side by side.
Is the S&P 500 a safe investment?
No investment is guaranteed safe. The S&P 500 has experienced drops of 30 to 50% during major downturns (2000-2002, 2008-2009, 2020). However, it has historically recovered and gone on to new highs over multi-year periods. Long time horizons generally reduce the impact of short-term volatility.
What is the difference between VOO and SPY?
Both track the S&P 500. The key differences: SPY has a slightly higher expense ratio (0.0945% vs. VOO's 0.03%) but is the most heavily traded ETF in the world, making it popular for active traders who value liquidity. VOO is generally preferred for long-term, buy-and-hold investors due to its lower cost. IVV matches VOO's expense ratio and is another solid option. For a full head-to-head, read the index investing guide from Vanguard's perspective.
