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Most people assume that the world's most successful investors have some edge that regular people can't access.
A network of insiders who call before the news breaks.Warren Buffettspent 60 years proving that assumption wrong, building one of the greatest fortunes in history through patience and simplicity rather than complexity.
And yet when people ask him what they should do with their money, his answer has been the same for decades.
It's an ETF that anyone can buy for three cents on every hundred dollars invested.
Buffett has made his position clear in shareholder letters, interviews, and annual meetings going back years.
In his 2016 shareholder letter, he wrote: "My regular recommendation has been a low-costS&P 500index fund." At Berkshire's 2021 annual meeting, he said: "In my view, for most people, I think that the best thing to do is buy an S&P 500 index fund." The most direct version of the advice came in his 2013 letter to Berkshire Hathaway shareholders, where he described the instructions he had written into his will for the money he would leave to his wife: "My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.
(I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors, whether pension funds, institutions or individuals, who employ high-fee managers,"according to The Motley Fool.
Warren Buffett's $187 billion warning grows louder every day Warren Buffett sends 7-word instruction to stock market investors Warren Buffett successor triggers massive stock portfolio shakeup He wasn't being modest.
This is the same man who beat the market by an enormous margin over six decades, and he was saying that for his own wife's trust, a simple index fund would beat most professional managers.
Vanguard S&P 500 ETF (VOO) tracks the S&P 500, charges 0.03% a year, and has grown to more than $950 billion in assets.
On a $10,000 investment that's $3 annually in fees.
That's what Buffett means when he says low cost, and that's why he keeps naming Vanguard specifically when people ask which fund.
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