Here’s our Club Mailbag email [email protected] — so you send your questions directly to Jim Cramer and his team of analysts. We can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. Question 1: Over the years, I’ve heard advisors like Jim Cramer and Warren Buffett say to do a base investment in S & P 500 index fund, but there are so many under that moniker. Are you referring to the S & P index itself, or one of the variations, and which symbol(s)? Thanks, Doug W. There are many exchange-traded funds (ETFs) that track the S & P 500 . The top three by assets under management, in order from largest to smallest, would be the State Street Global Advisors’ SPDR S & P 500 ETF Trust (SPY) , BlackRock’s iShares Core S & P 500 ETF (IVV) , and the Vanguard S & P 500 ETF (VOO) . As mentioned in the question, there are lots of ETFs that track the S & P 500, so by no means are these three the only games in town. There are, however, some differences to consider. The IVV and VOO both sport expense ratios of 0.03% (meaning you’ll pay about $3 per year for every $10,000 invested). The SPY has an expense ratio of 0.945% (meaning you’ll pay just over $9.45 per year for every $10,000 invested). That may not be a lot of money, but it is more than three times more, so it’s something to be aware of, especially if you’re looking to invest larger sums of money in these vehicles. With that in mind, you do get something for the added expense ratio in the SPY — increased liquidity. If you’re a more active investor this is something to consider. The SPY tends to have a lower bid-ask spread than both IVV and VOO and the spread remains much tighter when volatility strikes. For those unfamiliar with what that means, the bid-ask spread refers to the difference between what buyers are willing to pay (the bid) and what sellers are willing to accept (the ask). Because a…
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