Warren Buffett Says Most Investors Should Buy This Vanguard Index Fund. It Could Turn $500 Per Month Into $1 Million.
Outperforming the S&P 500 is difficult, so much so that nearly 90% of large-cap fund managers achieved worse returns over the last 15 years.
The S&P 500 advanced 1,860% over the last three decades, growing at a pace that would have turned $500 per month into $1 million.
10 stocks we like better than Vanguard S&P 500 ETF ›
Warren Buffett took control of Berkshire Hathaway in 1965. It started as a small textile operation but has since become a trillion-dollar company due to Buffett's knack for investing. Berkshire stock has returned 20% annually for six decades under Buffett's leadership, while the S&P 500 (SNPINDEX: ^GSPC) has added 10.4% annually.
Nevertheless, Buffett has never recommended Berkshire stock, but rather has consistently told investors to stick with a specific index fund. "Over the years, I've often been asked for investment advice," Buffett wrote in his 2016 letter to shareholders. "My regular recommendation has been a low-cost S&P 500 index fund."
Several investment products satisfy that description, but Buffett has specifically suggested the Vanguard S&P 500 ETF (NYSEMKT: VOO). Following his advice could turn $500 per month into $1 million over 30 years. Here's what investors should know.
The Vanguard S&P 500 ETF measures the performance of the S&P 500. The fund comprises growth stocks and value stocks from all 11 market sectors, and it covers more than 80% of domestic equities and nearly 50% of global equities by market capitalization. In short, the Vanguard S&P 500 ETF provides exposure to many of the world's most important companies.
The 10 largest positions in the index fund are listed by weight below:
Microsoft: 6.8%
Nvidia: 6.6%
Apple: 5.9%
Amazon: 3.9%
Alphabet: 3.6%
Meta Platforms: 2.8%
Broadcom: 2.3%
Tesla: 1.9%
Berkshire Hathaway: 1.8%
JPMorgan Chase: 1.4%
Warren Buffett is an adamant believer in U.S. innovation and commerce, so much so that he has warned investors to "never bet against America." The S&P 500 is basically a basket of the most influential U.S. companies, which explains why Buffett believes an S&P 500 index fund is the best way for most investors to get exposure to U.S. stocks.
Beyond that, beating the S&P 500 is hard even for experienced investors. More than three-quarters of large-cap funds underperformed the index in the last five years, and nearly 90% underperformed in the last 15 years. Put differently, most professional money managers would be better off buying an S&P 500 index fund rather than individual stocks.
Buffett made that point in his 2014 shareholder letter. "Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades."
The S&P 500 achieved a total return of 1,860% in the last three decades, meaning the index compounded at 10.4% annually. That period encompasses a broad range of economic and market environments -- three recessions, four bear markets, and 12 market corrections -- so investors can be reasonably confident in similar returns over the next 30 years.
At that pace, $500 invested monthly in the Vanguard S&P 500 ETF would be worth about $97,400 after one decade, $359,600 after two decades, and a little more than $1 million after three decades.
That last thing prospective investors should know is that the Vanguard S&P 500 ETF has an expense ratio of 0.03%. That means shareholders will pay $3 per year on every $10,000 invested in the index fund. Very few (if any) index funds are more attractive. I say that because the S&P 500 outperformed every other major stock market in the world over the last 20 years. It also beat benchmarks in fixed income, real estate, and precious metals, according to Morgan Stanley.
As a final thought, investors don't have to choose between individual stocks and an S&P 500 index fund. For instance, I keep some money in the Vanguard S&P 500 ETF and the rest in stocks. My logic is simple: My portfolio will outperform if my stocks beat the S&P 500, but it will still perform reasonably well if my stocks trail the S&P 500 because I have nearly a quarter of my portfolio in the Vanguard S&P 500 ETF.
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF 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 $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!*
Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of July 7, 2025
JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Warren Buffett Says Most Investors Should Buy This Vanguard Index Fund. It Could Turn $500 Per Month Into $1 Million. was originally published by The Motley Fool
Fehler beim Abrufen der Daten
Melden Sie sich an, um Ihr Portfolio aufzurufen.
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Fehler beim Abrufen der Daten
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
22 minutes ago
- Yahoo
Mexico's ‘cool-head' Trump approach tested by new tariff threat
(Bloomberg) — Mexican officials were taken aback by President Donald Trump's latest tariff threat after paying frequent visits to his top aides in Washington to convince him their efforts to fight drug trafficking were paying off. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Why Did Cars Get So Hard to See Out Of? How German Cities Are Rethinking Women's Safety — With Taxis Philadelphia Reaches Pact With Workers to End Garbage Strike For months, US officials have been effusive about Mexican cooperation on issues related to the border and security. 'Very responsive,' raved Secretary of State Marco Rubio. 'Positive momentum,' Treasury Secretary Scott Bessent called it. On Saturday, Trump blasted the country's response in a letter threatening 30% tariffs. 'What Mexico has done is not enough,' he wrote. 'Mexico still has not stopped the Cartels.' Mexican President Claudia Sheinbaum called for the country to keep 'a cool head,' but a sense of exasperation swept over people involved in the US negotiations, according to people familiar with the talks. Their cordial approach suddenly seemed to have yielded little — for now. The neighboring nation is looking to persuade Trump that Mexico and the US are complementary economies, and that Mexico is willing to cooperate against cartels in unprecedented ways, added the people, who asked for anonymity to discuss internal deliberations. Trump's threat of a 30% rate, with exceptions for products certified under the trilateral trade agreement between the two countries and Canada, is unlikely to drastically move the needle beyond the 25% rate already in place, according to Bloomberg Economics. Nearly 83% of US imports from Mexico were exempt from tariffs in May, mainly due to exemptions on USMCA-compliant goods. For rolling updates on tariffs, check out our liveblog > But Trump's 30% threat isn't much better than the 35% rate he announced for Canada, which has taken a much more confrontational tone with Trump while Mexico played nice. Some US officials tried to suggest cooperation could continue despite the letter. US Ambassador to Mexico Ronald Johnson said Saturday in Mexico City that Sheinbaum and Trump have a 'wonderful relationship' and no partnership should be easier than between their two countries. 'America First doesn't mean America alone. In fact, I'm here in Mexico with my arms open in friendship with a message of true respect for the sovereignty of Mexico,' he said at a tuxedo-filled gala thrown in his honor and attended by many from Mexico's political, business and media elite. Sector-specific tariffs, including on steel and soon on copper, had given Mexico in recent weeks reasons to appeal to Trump's officials for a fairer deal as it seeks to protect its position as the US's top trade partner in the world. It had shielded part of its export industry by negotiating to have a previously announced auto duty limited to the non-US portion of cars. 'Mexican authorities will likely continue to engage constructively with the US administration, on border control and to some extent also by hardening the stance against the drug cartels and the flow of fentanyl into the US, in order to preserve access to the US market under competitive conditions,' wrote Alberto Ramos, head of Latin American economics at Goldman Sachs Group Inc., in a note. Mexico's peace offerings have included the extradition of dozens of high-profile detainees involved in the drug trade, and an increase in busts along drug routes. Its security minister has been one of the visitors in the Washington talks, and on the domestic front the government has pushed for legislation to increase investigations of unsolved crimes. But ties have also been strained in recent weeks by the US announcement of a move to cut off three Mexican financial firms over potential involvement in money laundering for drug cartels. For now, Mexico is staying the course. The Economy Ministry said in a statement on Saturday that Minister Marcelo Ebrard had been in Washington since Friday for negotiations with the White House, the US Trade Representative and the Commerce Department, and that Mexico would defend its interests. The ministry called Trump's proposed tariff increase, to take effect Aug. 1, 'unfair.' Mexico will work to find 'an alternative that allows us to protect businesses and jobs on both sides of the border,' the ministry said. 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Trump's Cuts Are Making Federal Data Disappear Soccer Players Are Being Seriously Overworked Trade War? No Problem—If You Run a Trade School Will Trade War Make South India the Next Manufacturing Hub? ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
23 minutes ago
- Yahoo
Markets can't be bullied, and the US could face a financial crisis ahead of next year's midterm elections, former IMF official says
The dollar's plunge and gold's surge this year are signs that financial markets are not pleased with the Trump administration's policies, according to a former IMF official. Unless there is a major course correction, the U.S. should brace for a financial crisis leading up to congressional midterm elections next year, he warned. The world is losing faith in the dollar, and the U.S. could suffer a financial crisis next year, according to Desmond Lachman, a former deputy director of the International Monetary Fund's Policy Development and Review Department. In a Project Syndicate column on Monday, he noted that the U.S. fiscal situation was already shaky before President Donald Trump began his second term. But his tax cuts in the megabill that was just signed into law will add trillions to the deficit. Meanwhile, his tariffs and pressure on the Federal Reserve to lower rates have further weakened confidence in the dollar by stoking inflation concerns, Lachman, a senior fellow at the American Enterprise Institute, explained. 'Add to that Trump's apparent disregard for the rule of law, and markets see little reason to trust the US,' he added. In his view, that's why the dollar sank 10% against other top global currencies in the first half of the year, marking the greenback's worst such performance since 1953. The plunge came despite the tariffs and the wider premium between U.S. rates and those of other top economies, which would normally boost the dollar. Gold's surge of more than 25% this year is another sign of collapsing market confidence in the U.S., as is Treasury yields remaining elevated despite market turbulence, Lachman said. That all adds up to a very clear vote of no confidence from financial markets in the Trump administration's economic policies. 'The problem for Trump is that, unlike politicians, markets cannot be pressured or primaried,' he said, referring to the threat of ousting disobedient lawmakers via primary elections. 'If he refuses to heed investors' warnings, as seems likely, the US should brace for a dollar and bond-market crisis in the run-up to next year's midterm elections. The days of the world letting America live beyond its means are rapidly coming to an end.' To be sure, many on Wall Street have been sounding alarms about tariffs, inflation, widening deficits, unsustainable debt, the dollar and demand for U.S. Treasuries. But so far, tariffs have failed to trigger a spike in inflation, while the revenue collected from the duties is on pace to reach $300 billion this year. And despite warnings that 'bond vigilantes' will express displeasure with fiscal policies by demanding higher yields on bonds, that has yet to materialize. In fact, recent Treasury auctions have shown there remains healthy demand for U.S. debt, for now. In addition, many analysts see the dollar retaining its status as the world's primary reserve currency despite attempts to push alternatives. John Queen, fixed income portfolio manager at Capital Group, said in a recent note that bond markets are adapting to higher debt levels, adding that the interest rate market is 'incredibly efficient' at pricing in risks. While he is concerned about the size of the debt and its impact on borrowing costs, it's unknown when those worries will become reality. 'Many people have predicted that catastrophe is right around the corner and, someday, one of them is going to be right,' Queen wrote. 'Unfortunately, they are just guessing, so I am not going to predict that. I am instead going to say that I think the market is good at pricing in those concerns.' This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23 minutes ago
- Yahoo
High Growth Tech Stocks in Australia July 2025
As Australian shares track U.S. trends with the ASX 200 futures pointing to a modest gain, buoyed by Wall Street's record highs and strong performances in tech-heavy indices like the Nasdaq, there's a growing interest in high-growth tech stocks within Australia. In this dynamic market environment, identifying promising stocks often involves looking for companies that are not only innovative but also well-positioned to benefit from technological advancements and investor enthusiasm as demonstrated by recent developments such as successful funding rounds and new product launches. Name Revenue Growth Earnings Growth Growth Rating Pro Medicus 20.19% 22.27% ★★★★★★ Gratifii 42.14% 113.99% ★★★★★★ BlinkLab 51.57% 52.67% ★★★★★★ WiseTech Global 20.26% 25.03% ★★★★★★ AVA Risk Group 29.15% 108.15% ★★★★★★ Echo IQ 49.20% 51.35% ★★★★★★ Wrkr 55.92% 116.30% ★★★★★★ Immutep 70.26% 43.18% ★★★★★☆ Adveritas 52.34% 88.83% ★★★★★★ SiteMinder 18.78% 55.55% ★★★★★☆ Click here to see the full list of 46 stocks from our ASX High Growth Tech and AI Stocks screener. We're going to check out a few of the best picks from our screener tool. Simply Wall St Growth Rating: ★★★★☆☆ Overview: Megaport Limited offers on-demand interconnection and internet exchange services to enterprises and service providers across multiple regions, with a market cap of A$2.08 billion. Operations: The company generates revenue from on-demand interconnection and internet exchange services, with significant contributions from North America (A$117.77 million), Asia-Pacific (A$55.29 million), and Europe (A$33.85 million). At the recent Macquarie Emerging Leaders Conference, Megaport showcased its robust expansion strategy, emphasizing innovations in cloud connectivity and data center interconnects. This aligns with their participation in Connectbase's The Connected World platform, enhancing serviceability across a global network. Financially, Megaport is poised for growth with a revenue increase projected at 12.2% annually, outpacing the Australian market's 5.5%. However, challenges persist as their profit margins dipped to 2.9% from last year's 4.6%, and earnings saw a decline of 25.9%. Despite these hurdles, the forecast for earnings growth remains strong at an impressive rate of 33.9% per year, suggesting potential resilience and adaptability in navigating market dynamics. Click here to discover the nuances of Megaport with our detailed analytical health report. Explore historical data to track Megaport's performance over time in our Past section. Simply Wall St Growth Rating: ★★★★☆☆ Overview: Qoria Limited is engaged in marketing, distributing, and selling cyber safety products and services across Australia, New Zealand, the United Kingdom, the United States, Europe, and other international markets with a market capitalization of A$543.01 million. Operations: Qoria Limited generates revenue primarily through its provision of cyber safety services, amounting to A$108.72 million. The company's operations span multiple regions, including Australia, New Zealand, the UK, the US, and Europe. At the Macquarie Emerging Leaders Conference, Qoria outlined its strategy emphasizing AI and software innovations, a move aligning with industry shifts towards more integrated tech solutions. Despite currently being unprofitable, Qoria is on a trajectory to profitability with expected earnings growth of 58.3% annually. This growth is supported by robust R&D investments which are crucial for maintaining its competitive edge in the fast-evolving tech landscape. Moreover, with an annual revenue increase of 16.1%, Qoria outpaces the general Australian market's growth rate of 5.5%, positioning it well for future advancements in high-tech sectors. Dive into the specifics of Qoria here with our thorough health report. Review our historical performance report to gain insights into Qoria's's past performance. Simply Wall St Growth Rating: ★★★★☆☆ Overview: Technology One Limited is an Australian company that develops, markets, sells, implements, and supports integrated enterprise business software solutions both domestically and internationally, with a market cap of A$12.92 billion. Operations: Technology One Limited generates revenue primarily from its Software segment, contributing A$378.25 million, followed by Corporate at A$90.55 million and Consulting at A$82.87 million. Technology One, a significant player in the Australian tech sector, has demonstrated robust growth with a 13.1% annual increase in revenue and 16.4% in earnings, outpacing the broader market's averages of 5.5% and 10.9%, respectively. This growth trajectory is underpinned by strategic R&D investments that have not only enhanced its product offerings but also solidified its competitive position within the software industry, where it recently reported a substantial half-year revenue jump to AUD 285.69 million from AUD 240.55 million year-over-year. With recent dividends indicating strong financial health and an earnings call highlighting further progress, Technology One stands poised for continued relevance in high-tech sectors moving forward. Take a closer look at Technology One's potential here in our health report. Evaluate Technology One's historical performance by accessing our past performance report. Click here to access our complete index of 46 ASX High Growth Tech and AI Stocks. Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments. Unlock the power of informed investing with Simply Wall St, your free guide to navigating stock markets worldwide. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. Find companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ASX:MP1 ASX:QOR and ASX:TNE. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
