Warren Buffett's 1 Recommendation for Most Investors Turned $10,000 Into More Than $40,000 in 10 Years
Key Points
For many retail investors, it’s a smart move to avoid actively picking stocks.
Buying and holding a low-cost S&P 500 index fund is an easy way to gain exposure to the U.S. economy.
- 10 stocks we like better than Vanguard S&P 500 ETF ›
When the Oracle of Omaha speaks, investors listen. Warren Buffett has repeatedly offered one top recommendation for most people looking to allocate capital to the stock market, and his advice is surprisingly simple.
Investors who followed his words would have turned a starting amount of $10,000 into more than $40,000 over the past 10 years.
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Warren Buffett. Image source: The Motley Fool.
Buffett believes that the best course of action for non-professional investors is to buy a low-cost index fund that tracks the benchmark S&P 500. One particular exchange-traded fund (ETF) is an excellent choice -- the Vanguard S&P 500 ETF (NYSEMKT: VOO), which has generated a total return of 303% in the past decade (as of July 28).
The Vanguard ETF carries a small expense ratio of 0.03%. And it's a convenient vehicle that enables instant exposure to the largest publicly traded businesses in the U.S.
If there's anyone qualified enough to give average investors guidance, it's Buffett. As CEO of Berkshire Hathaway, he made capital allocation decisions that resulted in shares compounding at nearly 20% per year for several decades. He has one of the best track records ever.
However, even he knows how difficult it is to outperform the benchmark index. Most expert fund managers fail to do this over the long term. And for retail investors who don't possess the skills or have the free time to engage in active stock picking, a passive approach can work wonders.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!*
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*Stock Advisor returns as of July 31, 2026.
Neil Patel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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