Buying the index

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Buying the index

Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the same return.

Buying the Index

The act of buying all stocks tracked in the S&P 500 in proportion to their representation in that index. One buys the index when one wants to achieve the same return as the S&P 500 itself. The S&P 500 is the index used for this because it is considered an indicator of the state of the broader economy.