The Vanguard ETF Warren Buffett Endorsed in 2014 Would Have Turned $5,000 Into $20,465 Today
The article analyzes the long-term performance of the Vanguard S&P 500 ETF (VOO) based on Warren Buffett's 2014 recommendation. It demonstrates that index fund investing has significantly outperformed most actively managed funds over the last decade.
Why it matters
It provides empirical evidence for passive investment strategies, which is a cornerstone of modern personal finance advice.
You may know him as Berkshire Hathaway 's ( BRKA 0.17% ) ( BRKB 0.35% ) long-tenured, brilliant stock picker, as evidenced by Berkshire's market-beating returns.
Warren Buffett isn't necessarily a big fan of picking individual stocks, though, discouraging most ordinary investors not to whenever they have the option. His advice? Buy index funds meant to mirror the performance of the S&P 500 ( ^GSPC +0.42% ) ; he prefers the Vanguard S&P 500 ETF ( VOO +0.45% ) .
The thing is, his simple solution has proven to be brilliant since he first made his feelings on the matter clear.
Buffett's always leaned in this general direction. He put his commitment to the premise in writing back on March 1, 2014, however, penning in Berkshire's 2013 shareholder letter:
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