Another way to index is to buy a low-cost mutual fund like the Vanguard 500, which only charges you an expense ratio (annual fee) equal to 0.04% of your investment. By comparison, the SPY ETF charges a 0.0945% expense ratio, but allows you to trade in and out of the stock during the day. Mutual funds like the Vanguard 500 only allow you to buy or sell shares once a day based on closing market prices.
