One Warren Buffett ETF I'm Stocking Up On Before the End of 2024

The end of the year is a great opportunity to evaluate your investments and possibly enhance your portfolio by adding more stocks or funds. Exchange-traded funds (ETFs) are an easy way to invest in a wide range of companies at once, making them perfect for those who don't have the time or inclination to research individual stocks extensively.

With so many ETFs available, each with its unique set of pros and cons, it can be overwhelming to decide which ones to choose. However, one ETF endorsed by Warren Buffett has caught my attention, and it's one I'm planning to increase my investment in before the year ends.

A Powerful Investment for Your Portfolio

One of the top recommendations from Warren Buffett is the S&P 500 ETF. This fund includes stocks from the S&P 500, which features 500 of the largest and most successful companies in the United States. By purchasing just one share of an S&P 500 ETF, you gain exposure to hundreds of stocks across various sectors, providing you with instant diversification. This strategy reduces your investment risk without the need to buy numerous individual stocks.

The S&P 500 focuses on large-cap companies, including major players such as Apple, Amazon, and Nvidia, as well as established brands like Procter & Gamble, 3M, and Coca-Cola. If you're looking to invest in industry leaders across the market, an S&P 500 ETF is a solid choice.

Buffett's Endorsement

Warren Buffett, through his company Berkshire Hathaway, holds two notable funds based on the S&P 500: the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY). In a previous challenge, Buffett famously wagered $1 million that an S&P 500 fund would outperform a selection of five actively managed hedge funds over ten years.

The outcome? Buffett's investment generated a nearly 126% return, while the hedge funds returned between just 2.8% and 87.7%. The five hedge funds combined yielded an average of about 36% over the decade. In his letter to shareholders after this bet, Buffett emphasized:

"There was nothing unusual about stock market behavior during that ten-year period. Achieving investment success doesn't require extraordinary intelligence or extensive Wall Street knowledge, but rather the ability to ignore market volatility and focus on fundamentals."

A Long-Term Wealth Builder

Investing in the S&P 500 ETF is generally considered a stable choice, and it has the potential to yield significant returns over time with consistent contributions. Historically, the S&P 500 has seen an average return of about 7% per year. However, a long-term perspective is essential with this investment due to annual volatility. Over several years, ups and downs will tend to even out.

For instance, if you were to invest $200 each month into an S&P 500 ETF at an average return of 7% per year, your total investment would look something like this over time:

Years	Total Value
20	$98,000
25	$152,000
30	$227,000
35	$332,000
40	$479,000

Data calculations based on investment principles.

The sooner you start investing, the more your money can grow. Whether your monthly contributions are modest or substantial, beginning now rather than later can lead to remarkable growth. The S&P 500 ETF offers a wise option for those seeking a safer investment. Early and consistent investing can maximize your earnings, allowing you to proactively take advantage of this Buffett-approved asset.

investment, portfolio, ETF, returns, risk