Re: So, how do I actually do it?
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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?
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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.
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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?
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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.
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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?
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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.
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