Warren Buffett’s long-running advice to ordinary investors centers on a low-cost S&P 500 index fund, a strategy that places Vanguard’s S&P 500 ETF, known by its ticker VOO, at the center of the discussion for younger savers. In Berkshire Hathaway’s 2013 shareholder letter, Buffett instructed the trustee handling money for his wife’s benefit to place 90% in a very low-cost S&P 500 index fund and 10% in short-term government bonds, adding that he suggested Vanguard’s fund.
The fund’s scale has also expanded sharply.
Buffett’s case rests on broad diversification, low costs and a long holding period rather than frequent trading or individual stock selection. His 2013 letter advised beginning investors to accumulate shares over time and avoid selling simply because markets had fallen. More recent discussion of VOO and Vanguard’s total-market ETF has likewise framed broad index funds as long-term options for young investors.
That concentration means VOO offers exposure to hundreds of businesses but does not eliminate the possibility of substantial losses when the broad U.S. Stock market declines.