The Simulated Account

Spiders and Diamonds

If you already know in which company you wish to invest then please go right ahead and buy some shares. However, if you have no clue then you might want to consider some spiders or diamonds.

Spiders and Diamonds are Index Investment Trusts offered by the American Stock Exchange. They work very much like mutual funds.

Spiders (SPY) are the Wall Street name for SPDRs: Standard & Poor Depository Receipts. This is a fund that owns shares in each of the 500 companies that make up the Standard & Poor Stock Market Index of the 500 largest most important companies in the US.

Diamonds (DIA) are the Wall Street name for the Dow Jones Industrial Receipts. This is a fund that owns shares in the 30 companies that make up the Dow Jones Industrial Average.

The American Stock Exchange (AMEX) offers several Exchange Traded Funds (ETF) (a technology index, a utility index, etc.) and country specific indices (a Canada index, a Mexico index, etc.).