Warren Buffett highlights S&P 500 index funds as a low-risk, long-term investment capable of generating $1 million over time.
Warren Buffett reiterated his long-standing recommendation for most investors to hold S&P 500 index funds, calling them “the best thing” during Berkshire Hathaway’s 2020 annual meeting. His endorsement follows a decade-long bet where his S&P 500 investment returned nearly 126%, outperforming five hedge funds averaging 36% gains.
The S&P 500 has historically delivered strong long-term returns, with only 6% of 10-year periods resulting in losses, compared to 26% for one-year periods. Buffett’s advice underscores the index’s consistency and lower risk over extended holding periods.
Buffett’s stance aligns with his broader investment philosophy, favoring passive, low-cost strategies for retail investors. The S&P 500’s track record supports its potential to build significant wealth over time.