{"id":175178,"date":"2025-04-07T08:08:57","date_gmt":"2025-04-07T08:08:57","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/warren-buffett-recommends-this-vanguard-index-fund-it-could-turn-450-per-month-into-888200\/"},"modified":"2025-04-07T08:08:57","modified_gmt":"2025-04-07T08:08:57","slug":"warren-buffett-recommends-this-vanguard-index-fund-it-could-turn-450-per-month-into-888200","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=175178","title":{"rendered":"Warren Buffett Recommends This Vanguard Index Fund. It Could Turn $450 Per Month Into $888,200."},"content":{"rendered":"


\n<\/p>\n

\n

Warren Buffett over the years has guided Berkshire Hathaway<\/strong> to enormous success. It was a doomed textile operation in 1965, but has since evolved into a trillion-dollar company under his leadership. Consequently, Buffett has become a trusted source of inspiration for countless investors.<\/p>\n

Buffett reminded attendees at Berkshire’s annual meeting in 2020, “In my view, for most people, the best thing to do is to own the S&P 500<\/strong> (^GSPC<\/a> -5.97%<\/span>)<\/span> index fund.” He has frequently repeated that advice, and has even suggested the Vanguard S&P 500 ETF<\/strong> (VOO<\/a> -5.96%<\/span>)<\/span>.<\/p>\n

Here’s how that advice could turn $450 invested monthly into $888,200 over 30 years.<\/p>\n

The Vanguard S&P 500 ETF provides exposure to influential stocks like Apple, Nvidia, and Microsoft<\/h2>\n

The S&P 500<\/a> is considered the single best benchmark for the U.S. stock market. It tracks the performance of 500 large companies that span every stock market sector<\/a>, covering about 80% of domestic equities and 50% of global equities by market value. In short, the S&P 500 includes many of the most influential companies in the world.<\/p>\n

Investors cannot directly purchase shares of a stock market index like the S&P 500. But the Vanguard S&P 500 ETF circumvents that problem. It is an investment product that lets investors spread money across the index’s member stocks.<\/p>\n

Here are the 10 largest positions in the Vanguard S&P 500 ETF, listed by weight:<\/p>\n

    \n
  1. Apple:<\/strong> 7.2%<\/li>\n
  2. Nvidia:<\/strong> 6.1%<\/li>\n
  3. Microsoft:<\/strong> 5.9%<\/li>\n
  4. Amazon:<\/strong> 3.9%<\/li>\n
  5. Alphabet:<\/strong> 3.6%<\/li>\n
  6. Meta Platforms:<\/strong> 2.9%<\/li>\n
  7. Berkshire Hathaway:<\/strong> 1.9%<\/li>\n
  8. Broadcom:<\/strong> 1.8%<\/li>\n
  9. Tesla:<\/strong> 1.6%<\/li>\n
  10. JPMorgan Chase:<\/strong> 1.5%<\/li>\n<\/ol>\n

    As mentioned, Warren Buffett<\/a> has long regarded a low-cost S&P 500 index fund as the best way for most nonprofessional investors to get exposure to the U.S. stock market. “I don’t think most people are in a position to pick single stocks,” he told attendees at Berkshire’s annual meeting in 2020.<\/p>\n

    That’s because most people lack the commitment and temperament required to identify quality stocks on a company-by-company basis. “The goal of the nonprofessional should not be to pick winners,” Buffett wrote in his 2013 shareholder letter. Instead, he said they should “own a cross-section of businesses that in aggregate are bound to do well. An S&P 500 index fund will achieve this goal.”<\/p>\n

    How the Vanguard S&P 500 ETF could turn $450 per month into $888,200<\/h2>\n

    The S&P 500 advanced 1,670% in the last three decades, compounding at 10% annually, even though the U.S. economy was hit by three recessions<\/a>. That period encompasses such a broad range of economic conditions that investors can be reasonably confident in similar returns over the next three decades.<\/p>\n

    At that pace, $450 invested monthly in the Vanguard S&P 500 ETF would be worth $86,000 after one decade, $309,200 after two decades, and $888,200 after three decades. Importantly, those numbers assume dividends are consistently reinvested and that no money is withdrawn.<\/p>\n

    The last item of consequence is the expense ratio<\/a>. The Vanguard S&P 500 ETF has a cheap expense ratio of 0.03%, meaning shareholders will pay only $3 annually on every $10,000 invested in the fund. Investors will be hard-pressed to find another index fund that offers similar upside at a lower price. Indeed, the S&P 500 has outperformed most other asset classes over the last few decades, including international stocks, fixed income, real estate, and precious metals.<\/p>\n

    Importantly, while Buffett believes most people should avoid individual stocks and instead stick with an S&P 500 index fund, investors willing to do the required research<\/a> can combine the two approaches. For instance, I keep a large percentage of my portfolio in the Vanguard S&P 500, and the rest is allocated to individual stocks. That strategy leaves room for me to beat the market if my stocks outperform, but also limits how much I could trail the market if my stocks underperform.<\/p>\n<\/p><\/div>\n

    \n <\/p>\n

    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\u2019s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool\u2019s 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<\/a> 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<\/a>.<\/em><\/p>\n

    <\/span>\n <\/div>\n\n","protected":false},"excerpt":{"rendered":"

    Warren Buffett over the years has guided Berkshire Hathaway to enormous success. It was a doomed textile operation in 1965, but has since evolved into a trillion-dollar company under his leadership. Consequently, Buffett has become a trusted source of inspiration for countless investors. Buffett reminded attendees at Berkshire’s annual meeting in 2020, “In my view, […]<\/p>\n","protected":false},"author":1,"featured_media":175179,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[93],"tags":[47870,11460,11279,5491,37513,9319,11577,6868],"dealstore":[],"offerexpiration":[],"class_list":["post-175178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-buffett","tag-fund","tag-index","tag-month","tag-recommends","tag-turn","tag-vanguard","tag-warren"],"yoast_head":"\nWarren Buffett Recommends This Vanguard Index Fund. 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