Can I just invest in the S&P 500?

Yes, you absolutely can. You can invest in what is known as an exchange-traded fund (ETF). If you have a market tracking fund, you will take a small position in each of the 500 companies on the S&P 500 traditionally based on market capitalisation. This means you'll own more of the larger companies and less of the smaller ones, although you can get an equal weighted fund.

How long has the S&P 500 been around?

The S&P 500 was officially created in 1957, but its origins date back a little further to 1923. Back then it wasn't quite the S&P 500, it was a smaller index. When the series first started, it included 233 companies and covered 26 industries. Fast forward 30 years to 1957 when the S&P 500 expanded into the largest 500 companies in the world.

Is the S&P 500 a good investment option?

While past performance isn't necessarily a guarantee of future success, if you look back, investing in the S&P 500 has been a strong investment. Due to the sheer size of the market and the exposure to a broad range of businesses, it has been seen as one of the safer investments you can make.

How much would $10,000 invested in the S&P 500 be worth today?

If you had invested $10,000 in the S&P 500 at the beginning of 1980, you'd have around $1,003,074 according to officialdata.org. This means your investment returns are in total 9,903.75%, or 11.38% a year. According to the site, this would let you beat inflation by 2,684.74%, or 8.09% per year.

How much does the S&P 500 return a year?

The S&P 500 has had an average return of 11.38% over the last 40 years, but like all market indexes it doesn't have a straight line in terms of performance. Looking back, its worst performing year was in 1931 when returns were negative 47.07% (although it wasn't 500 businesses back then). Its best year was just 2 years later in 1933, when the market returned 46.59%. If you take from 1957, when it was the S&P 500, the market index's worst year was negative 38.49% in 2009 and its best year was in 1995 when investors gained 34.11%.

Can the S&P 500 make you rich?

Taking a historical perspective, if you invest enough money and have a long-term time horizon you can become a millionaire through the market. For example, if you invest $100 a week or $5,000 a year for the next 40 years and assume an annual return rate of 8% (which is lower than the market average) you would walk away with just shy of $1.4 million.