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Dating back to 1957, the Standard & Poor’s 500 (S&P 500) Index is broadly considered to be the most reliable barometer of the stock market, often serving as a benchmark for the performance of specific companies or industries.
But in addition to being a gauge for performance, indices can present safe and reliable investment opportunities. Beyond buying shares in the index’s individual companies, a number of providers offer exchange traded funds (ETFs) based on entire indices, including the S&P 500.
And in the long run, the S&P has a history of strong gains, with Vanguard’s S&P 500 ETF fund having delivered an 81% uptick in value since its inception in 2018.
Prospective investors can find everything they need to know on the matter by continuing to read our guide on how to invest in the S&P 500 in 2024
Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
What is the S&P 500 and How Can You Invest in it?
Widely considered the most reliable indicator of the US stock market, the S&P 500 measures the performance of the United States’ 500 largest public companies. With the index’s companies representing various sectors of the economy, it is often used as a benchmark for investment portfolios.
Investors can buy into the S&P 500 in one of two ways, either investing directly in any of the index’s individual firms, or through an index fund which takes into account the performance of the S&P 500 as a whole. While both are popular methods, the latter offers a much larger degree of diversification, allowing them to mitigate risk.
The caveat to this is that investing in indices is potentially less lucrative than individual stocks. An individual’s broader strategy and appetite for risk will determine which method is more appropriaste.
How is the Price of the S&P 500 determined?
The S&P 500’s price is determined through a weighted system. This means that each company’s weight in the index is proportional to its market cap, rather than each company possessing equal influence. This methodology is utilized by the majority of the world’s stock indices.
This calculation allows the S&P 500 to maintain its credibility and influence as an accurate barometer of the stock market.
S&P 500 Index Price 2024
Renowned businessman and investor extraordinaire Warren Buffet has previously hailed S&P 500 funds as one of the best investment options available, and for good reason. The Index has generated an average of around 10% in average annualized returns since its inception, and has continued to perform handsomely in more recent years, delivering 27% in returns since January 2021 and 20% since January 2023.
Throughout 2020, the S&P 500 experienced significant volatility due to the COVID-19 pandemic, initially plummeting in March but rebounding swiftly later in the year. In 2021, the Index continued its upward trajectory, reaching new record highs amid optimism surrounding economic recovery, vaccination efforts, and accommodative monetary policies.
But 2023 was an exceptional year for the Index, with strong rallies in November and December helping it to reach all-time highs and close to double its average annualized growth rate.
Where to Invest in the S&P 500 in 2024
Investors can explore S&P 500 funds through various online brokerage platforms, with eToro standing out as a preferred choice. eToro offers a user-friendly interface, low minimum deposits, and supports fractional share trading, making it accessible for newcomers to the investment scene.
1. eToro – Best platform to buy S&P 500 stock
Established in 2006, eToro is a standout social trading platform that grants access to a diverse range of financial markets and asset classes, including ETFs and notable indices like the S&P 500. Boasting a global community exceeding 20 million traders, eToro offers competitive trading and non-trading fees, featuring free stock and ETF trading while eliminating account or deposit fees.
Functioning as a social trading platform, eToro fosters user communication and interaction within its trading community, akin to popular social networking sites. For US-based investors, entry is exceptionally accessible, demanding only a $10 minimum deposit, with no additional deposit or account fees. This affordability extends to investing in indices like the S&P 500, facilitated by eToro’s support for fractional share trading, enabling traders to acquire portions of higher-value stocks.
Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
2. Robinhood – Commission-free stock investments
Renowned for its commission-free approach, Robinhood has garnered widespread popularity due to its user-friendly interface, attracting millions since its inception. Distinguishing itself with a zero-commission model, Robinhood extends this advantage to include stocks, ETFs, and options, making it an attractive choice for budget-conscious traders.
Going beyond conventional trading platforms, Robinhood cultivates a community atmosphere reminiscent of social networks, promoting social trading. With a low minimum deposit requirement, accessible fractional share trading, and the absence of account fees, Robinhood serves as a financially accessible entry point for investors. This particularly benefits beginners seeking an affordable and user-friendly platform for their investment journey. The platform’s dedication to providing a seamless and economical trading experience has solidified its position as a significant player in the investment landscape.
3. Charles Schwab – Educational tools and resources for stock trading
Charles Schwab stands as a reputable online brokerage platform, renowned for its broad array of investment options and comprehensive services that appeal to a diverse investor base, emphasizing reliability.
Featuring a user-friendly interface, Charles Schwab grants access to diverse financial markets and investment products. While not adopting a zero-fees model, it compensates by providing a robust suite of research tools and educational resources.
Accommodating various account types, Charles Schwab’s platform caters to both novice and experienced investors. With a strong commitment to customer service and innovation, Charles Schwab distinguishes itself as a prominent choice for those seeking a comprehensive online brokerage experience. To obtain the latest information, it’s advisable to verify current details on their official website.
4. Webull – A modern and affordable brokerage platform
Established in 2018, Webull functions as a dynamic commission-free trading platform, celebrated for its intuitive design and advanced features. Recognized for its user-friendly interface, it furnishes real-time market data and analysis tools.
Specializing in equities and options, Webull accommodates both novice and experienced traders. Its notable feature lies in providing commission-free trades across a diverse range of assets, encompassing stocks and ETFs. The platform stands out by facilitating extended trading hours, offering flexibility for active traders.
Webull’s appeal is heightened by its easily accessible mobile app and desktop platform, coupled with the absence of minimum deposit requirements. These combined features position Webull as an enticing option for individuals seeking a contemporary and cost-effective trading experience.
Our Verdict on Investing in the S&P 500 in 2024
With ETF’s such as Vanguard’s seeing an uptick of more than 80% since 2018, it is clear that the S&P 500 has the potential to offer diversification, security and high returns in equal measure.
In addition to being historically endorsed by high-profile investors such as Warren Buffet, the Index also displayed exceptional resilience during the pandemic headwinds of 2020, going on to achieve significant growth since and maintaining annual returns of more than 10% on average.
Based on this, it is clear that the S&P 500 remains a smart investment in 2024, providing investors conduct the proper research to choose a reputable investment platform.
S&P 500 FAQs
How should a beginner invest in the S&P 500?
With its low minimum deposit, 0% commission, and range of social trading features, eToro is the ideal brokerage for a beginner investor.
Can I buy S&P 500 with $100?
Yes. eToro, in addition to a number of other online brokerages, offers low or no minimum deposit amounts. With $100, investors can either buy shares in individual companies included in the S&P 500, or invest in an index fund containing all of the S&P 500 companies.
Is investing in the S&P 500 a good idea?
While potentially less lucrative than betting on individual stocks, investing in index funds is generally considered to be a safe and reliable investment. The S&P 500 in particular is no exception, given its average of 10% annualized returns since it began in 1957.
What is the minimum investment for the S&P 500?
This depends on the investment platform used. eToro is an example of a brokerage with a low threshold for entry, at just $10.
Sam Alberti has recently joined Trading Platforms as a content editor, having spent the past four years working as a journalist across various financial and business niches. He graduated from the University of Kingston in 2019 with a Master’s Degree in Journalism and an NCTJ Diploma, and has since developed a passion for both consumer and corporate finance. He now specializes in producing engaging and thoroughly-researched web content on all things finance.
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