So, how do I actually do it?

First:
I want to buy an index fund (S&P 500 or the Welshire 5000). How do I go about doing that? Do I open a broker account with something like scottrade/etrade? Will sharebuilder do ($4/trade)? I've read some in their sites, but I need a "Yes, you can buy S&P from sharebuilder and it's not a bad idea" before I do it. BTW, what exactly is vanguard?

Second:
Based on your experience, do you think it's better to buy S&P or Welshire? I'm thinking S&P is better because Welshire is just...too average. I'm thinking S&P will give a better return since it's less diversified. I really might not know what I'm talking about though and this could sound like complete nonsense.

Third:
It would be extremely helpful if we can have a sticky FAQ for this forum so newbs like me don't have to keep asking stupid questions like that. /images/graemlins/wink.gif

Thanks

[Paluka]

It is very easy to invest in the S&P 500, you just by the SPY ETF.

[Sniper]

[ QUOTE ]
I want to buy an index fund (S&P 500 or the Welshire 5000). How do I go about doing that? Do I open a broker account with something like scottrade/etrade? Will sharebuilder do ($4/trade)? I've read some in their sites, but I need a "Yes, you can buy S&P from sharebuilder and it's not a bad idea" before I do it. BTW, what exactly is vanguard?

[/ QUOTE ]

You open an online brokerage account. I wouldn't use sharebuilder for this purpose.

Vanguard is a mutual fund comapny. They market and manage mutual funds.

Stick with the SP500, until you feel comfortable that you understand what you are doing and ready to diversify.

Ok so I think I'll open an account with Scottrade because their fees are low. After that all I have to do is buy x amount of "SPY" (I'll get 15 shares or so). Right?

Ok, two more questions: I see on the news sometimes things like S&P 500 1,231.02 with an upwards or downwards arrow. What's 1,231.02 stand for? Their ETF, "SPY", Is only like $123 so where is that 1,231.02 coming from?

While searching and reading other threads, I read that a poster suggested to someone to wait until next year before investing in an index fund. I was also reading the wallstreet journal today (most of it was going over my head) but I saw an article about Fed's raising interest rates tomorrow and they said that if that happens the economy will be pretty slow for a year or so. What do you think? Should I wait or just go ahead and buy?

Thanks.

[ QUOTE ]
Ok so I think I'll open an account with Scottrade because their fees are low. After that all I have to do is buy x amount of "SPY" (I'll get 15 shares or so). Right?

[/ QUOTE ]

I need someone to at least answer this question before I go ahead and do it. Any advice on this or the other questions would be appreciated.

Thanks.

[gila]

The efts trade for about 1/10 the price of the index. Buy those, or a mutual fund that follows the index. I do not think you can buy the index itself.

[buffett]

I'm really not being rude here.....but if your questions are as basic as the ones below, then you probably shouldn't invest anything yet. Read a couple of books first, find out the basics, then start. You don't need to be in that much of a hurry.
-web

[ QUOTE ]
Right? ....What's 1,231.02 stand for? where is that ... coming from?...What do you think? Should I wait or just go ahead and buy?

[/ QUOTE ]

Yes you're probably right. I've read some stuff but they don't actually teach you everything you need to know. One thing common in pretty much all the books I read was that index funds were safe..that's why I wanted to invest in the S&P because I thought that was the best way to learn.

[Sniper]

[ QUOTE ]
Ok so I think I'll open an account with Scottrade because their fees are low. After that all I have to do is buy x amount of "SPY" (I'll get 15 shares or so). Right?


[/ QUOTE ]

If you buy SPY, you will pay a brokerage commission on your trade. For small purchases, you are better off putting your money into a no-transaction-fee Index fund.

[ QUOTE ]
Ok, two more questions: I see on the news sometimes things like S&P 500 1,231.02 with an upwards or downwards arrow. What's 1,231.02 stand for? Their ETF, "SPY", Is only like $123 so where is that 1,231.02 coming from?

[/ QUOTE ]

The 1231.02 is the actual value of the SP500 index. The 123 is the value of SPY (it trades at roughly 1/10th the index value). The index funds will have different prices. The actual price is pretty much irrelevant, as the %change will be roughly the same.

[ QUOTE ]
While searching and reading other threads, I read that a poster suggested to someone to wait until next year before investing in an index fund. I was also reading the wallstreet journal today (most of it was going over my head) but I saw an article about Fed's raising interest rates tomorrow and they said that if that happens the economy will be pretty slow for a year or so. What do you think? Should I wait or just go ahead and buy?

[/ QUOTE ]

If you think you know enough about how to enterpret this information, then sure try to time the market. But, if you did, you wouldn't be asking these questions, would you?

If you looking for a long term investment to get started in your long education of the markets, then just stick the money in an index fund and start learning.