

Q: Is investing in the S&P 500 a good place to start?

A: Investors looking for an easy and effective way to buy stock will have a tough time beating the Standard & Poor's 500.

The S&P 500 is a commonly followed collection of 500 of the largest companies trading in the U.S. It's a collection of stocks that represent companies from the 10 major sectors of the economy. There's a good mix of everything in the S&P 500, ranging from companies that are growing fast and have rich valuations and more "value" priced stocks that are trading at a discount.

The S&P 500 is also very easy for investors to buy and hold. There are countless mutual funds and exchange traded funds that invest their money in the S&P 500. That means a beginner can easily set up a brokerage account or an account with a major mutual fund company and have access to an investment that tracks the S&P 500.

Since the S&P 500 is so widely followed and so many products that track it are available, it's a low-cost option, too. The fees on index mutual funds and exchange traded funds that track the S&P 500 are among some of the lowest.

Once you get more advanced in investing, you might want to diversify further. You might choose to add investments in small companies, international companies and real estate investment trusts to go with your core holding in the S&P 500. Another good decision might be to add a dose of bonds to your portfolio. But to start, the S&P 500 is a winner.

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