Had You Parked $5,000 in This Vanguard ETF When Warren Buffett Recommended It in 2014, Here's How Much You'd Have Today
Buffett is a big advocate for low-cost index funds despite his uncanny ability to pick individual stocks.
Overview
Warren Buffett served as chief executive officer of the Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) holding company for 60 years between 1965 and 2025. His investment decisions turned it into a conglomerate with numerous wholly owned subsidiaries, a $357 billion stock portfolio, and a $1 trillion valuation.
Berkshire stock delivered a compound annual return of 19.7% during Buffett's tenure, so an investment of $500 in 1965 would have grown to a whopping $24 million by the time he stepped down. But he was a full-time professional, and he always knew the average investor would struggle to replicate his results.
Details
For that reason, Buffett often recommended buying a low-cost, exchange-traded fund (ETF) that mimics a diversified index like the S&P 500 (SNPINDEX: ^GSPC) rather than trying to pick individual stocks. In Berkshire's 2013 annual report (published in February 2014), he specifically suggested the Vanguard S&P 500 ETF (NYSEMKT: VOO) for its extremely low fees.
Source
Originally published at www.fool.com.