<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>It usually only makes sense to buy riskier investments after loading up on safer ones.</li><li>Index funds are among the safest investments around.</li><li>XRP is a fairly risky investment, but it could grow by quite a bit over time.</li><li>10 stocks we like better than XRP ›</li></ul>When people buy cryptocurrencies like XRP (CRYPTO: XRP), they're often doing it because they're dreaming about their pick going to the moon and making them rich. That rarely happens. On the other side, most people have fairly modest expectations when they buy index funds like the SPDR S&amp;P 500 ETF Trust (NYSEMKT: SPY), which has averaged a return of about 10% annually thanks to its broad-based holdings.But which of these assets is the better buy right now with a modest investment of $500?Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2MDExNi9pbnZlc3Rvci1vbi10cmFkaW5nLWZsb29yLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="456" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2MDExNi9pbnZlc3Rvci1vbi10cmFkaW5nLWZsb29yLmpwZyZ3PTcwMA"/>Image source: Getty Images. <h2>What $500 buys you</h2>An exchange-traded fund (ETF) like SPDR will let you buy fractional shares and then subsequently own a small slice of the U.S.'s largest businesses. So having just $500 in starting capital is not an impediment, even though the ETF goess for about $670 a share (as of March 12).In terms of its recent performance, the market returned about 17.7% in 2025, well above the historical norm. But despite being a safe investment, it can lose value too, as in the brutal bear market of 2022, when it lost 18.1%. The point is that over decades, its monthly and annual swings make for a fairly consistent upward slope.Buying the index might seem like a pretty boring way to invest, and it's true that there's almost zero chance of it ever making you rich overnight. But it's exactly this lack of excitement that makes it such a powerful way to compound your wealth over time, and every investor should probably own a large allocation.A $500 investment in XRP, on the other hand, gives you about 365 XRP as of today. Those coins don't confer any governance rights, nor do they pay any dividend. During the past three years, XRP's price is up by about 265%, smashing the return of an index fund. But in the last three months, it's down by 31%, so it's an extremely volatile asset that's fully capable of leaving holders with major losses for long stretches.<h2>What's the right move here?</h2>For most investors, the choice between XRP or an index fund is a question of how well your portfolio is diversified.XRP is a risky investment because its price depends on the coin's issuer, Ripple, a closely held company, successfully marketing the coin as part of a suite of financial services that it offers to banks and other financial companies. Ripple has many different paths to succeed within that mandate, but there's no getting around the fact that buying XRP is essentially a bet that a business will be doing things to increase its value.On the other hand, an index fund doesn't need a specific leader or group of software developers to execute a roadmap. Indexes track the output of hundreds or sometimes thousands of companies. If one of the stocks in the index underperforms a lot and shrinks, it eventually gets removed from the index.Thus, if you don't already have a significant allocation of index funds in your portfolio, buy some with $500. If you're already fully diversified, including both index funds and safer crypto investments, it could still be worth buying some XRP.<h2>Should you buy stock in XRP right now?</h2> Before you buy stock in XRP, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $514,000!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,029!* Now, it’s worth noting Stock Advisor’s total average return is 930% — a market-crushing outperformance compared to 187% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of March 15, 2026. Alex Carchidi has positions in SPDR S&amp;P 500 ETF Trust. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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The article compares investing $500 in XRP versus an index fund like the SPDR S&P 500 ETF Trust. Index funds are considered safer, averaging a 10% annual return, while XRP is riskier but has shown significant growth, up 265% over three years. However, XRP's volatility is highlighted, with a recent 31% drop. The recommendation is to prioritize index funds for diversification, but XRP may be worth considering for those already diversified. The Motley Fool suggests other stocks may offer better returns than XRP.

- The article compares the safer investment of index funds with the riskier option of XRP, emphasizing the importance of prior diversification.  
- While index funds like the SPDR S&P 500 ETF Trust provide steady long-term returns, XRP is subject to significant volatility and hinges on the success of its issuer, Ripple.  
- For most investors without substantial index fund exposure, allocating $500 to an index fund is recommended, whereas seasoned investors may consider investing in XRP if already diversified.

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Coinbase

REX-Osprey XRP ETF

Amplify Transform Data Sharing ETF

Grayscale XRP Trust ETF

Bitwise XRP ETF

Galaxy Digital

Franklin XRP ETF

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SPDR S&P 500

Better Buy Right Now With $500: XRP vs. an Index Fund