Spiders with eight legs might make you run from the room or reach for a shoe. But spiders with 500 legs can boost your portfolio's performance.
Spiders, trading on the AMEX (American Stock Exchange) under the ticker symbol SPY, are Standard & Poor's 500 Depositary Receipts. Just like S&P 500 Index funds, they represent a bundle of 500 of America's biggest and brightest corporations, such as PepsiCo
Spiders have some advantages over their index-fund brethren. Whereas funds sometimes have minimums of several thousand dollars, you can buy and sell as little as one Spider share at a time (though with commissions factored in, as they always should be, that might not be the most cost-effective move). And, while you have no control over when mutual funds generate taxable capital gains, with Spiders, gains or losses occur mainly when you sell your shares.
To learn more about investing Foolishly, visit our Fool's School and our Investing Basics area. Or check out some of our inexpensive and well-regarded online how-to guides (which feature money-back guarantees). You can also learn all about brokerages and find one that's right for you in our Broker Center.