Because it’s the gold standard of the U.S. stock market. The S&P 500 includes 500 of the largest American companies—think Apple, Microsoft, Amazon, and many others that your children will definitely hear about.

The reason I keep recommending this index is simple: the market fluctuates, but the S&P 500 has historically grown over the long term. It’s a proven path for those who don’t want to overcomplicate things and just want their money to work for them, instead of the other way around.

Five years ago, in September 2019, the S&P 500 was around 3,000 points. Fast forward to September 2024, and it’s trading at approximately 4,500 points. That’s about a 50% increase!
If you had invested $100,000 in 2019, you’d now have around $150,000. And that doesn’t even include the dividends that companies pay to their shareholders.

The key thing to remember is that the S&P 500 is a marathon, not a sprint. Over these five years, there were ups and downs, but in the long run, the index kept growing—just like my love for morning coffee.

"Okay," you might say, "I’m convinced. But what does ‘buying the S&P 500’ actually mean? It’s not like picking up bananas at the supermarket."
You’re right, but don’t worry—it’s easier than it sounds.

To invest in the S&P 500, you need to buy an ETF (Exchange-Traded Fund). An ETF is a fund that mirrors the S&P 500 exactly. Think of it like a box of cookies, where each cookie represents a share of one of the 500 companies in the index. You don’t have to buy stocks of each company individually—you buy the whole batch at once.

Now, let’s talk about which ETFs to pick. Here are three of the most popular ones:

1. SPDR S&P 500 ETF (SPY) – The granddaddy of all ETFs, the first and most well-known.
2. iShares Core S&P 500 ETF (IVV) – The younger sibling of SPY, with slightly lower fees.
3. Vanguard S&P 500 ETF (VOO) – A solid alternative for fans of Vanguard (and there are plenty).

The differences between them are minor: they all track the same index, but they vary in fees and management structures. For example, SPY is the most liquid, meaning it’s the easiest to buy and sell—even at the last minute before the market closes.

Numbers Again: How Have These ETFs Performed?
Over the last five years (2019–2024), the SPY ETF has risen from around $290 per unit to $450, closely following the S&P 500’s growth. Just like the index, it experienced ups and downs, but in the end, it gained about 55%.

If you had invested $100,000 in SPY, you’d now have around $155,000. Not bad, right?

Here’s an important detail: Why doesn’t the ETF’s growth always match the index exactly? The answer lies in dividends and fees. ETFs pay out dividends, which you can reinvest (or spend on a new gadget—no judgment). At the same time, fees—although minimal—slightly eat into profits. This causes small differences, but in the long run, ETFs and the index move in the same direction.

If you’re new to the stock market and have $100,000 to invest, I’d suggest splitting your investment among multiple ETFs to reduce risk while still ensuring strong returns. For example:

• Put the bulk of your money into VOO,
• Allocate some to IVV, and
• Keep a portion in SPY.

This way, you get maximum diversification and can feel confident even during turbulent times.

Investing in the stock market is a long-term game. Don’t panic when the market dips. Remember how it crashed in 2020? And how quickly it bounced back?

Patience and strong nerves are your best allies in this business.
So, if you’re looking for a simple, reliable investment that requires minimal effort—S&P 500 ETFs might just be your best bet.