Like many others, I consider Warren Buffett to be the greatest investor of all time. We are also grateful for the well-known billionaire’s ability to unravel complex investment ideas and create simple and memorable advice.
Perhaps most interesting is the advice he left for his wife’s property trustee. His in 2013 Letter to shareholders He writes that he advises trustees to invest 90% of their assets.With a very low cost S & P 500 index fund“.
The support for this S & P 500 index fund is known for the Sage of Omagh, which made me think about it. I decided to follow the route he considers to protect one of the most important people in his life.
The S & P 500 is the most important indicator in the United States and is widely regarded as an important barometer of the health of the US stock market.
Includes 500 large companies selected by the Commission. The company must have a sufficient market capitalization and hold at least 10% of the outstanding shares. This adds to the liquidity and profitability requirements.
I think buying a low cost S & P 500 Exchange Traded Fund (ETF) is the easiest way to recreate his advice. ETFs are index or sector tracking funds that can be bought and sold like stocks through most online brokers. ETFs allow you to invest in multiple companies with a single fund, which is usually low cost.
I’m especially looking at one. Vanguard S & P 500 ETF (LSE: VUSA) That’s what I’m exploring. It’s a huge size, with assets over $ 37 billion, very low cost, and an ongoing fee of 0.07%.
ETFs follow the S & P 500 and include well-known companies such as: Microsoft, Apple When Amazon.. In terms of industry, this index includes various sectors such as technology, retailers and banks.
Do you want to invest?
It may not apply to everyone, but I think I will include this ETF in my inventory as part of a balanced portfolio.
However, ETFs and indexes themselves are not without their drawbacks. Most notably, the index only includes US companies. It’s true that many of these companies derive some of their revenue from outside the United States, but this percentage has declined over time.
The index is market capitalization weighted. This will increase the percentage of allocations to companies with the largest market capitalization. This can mean that the largest few companies will dominate the index.
Finally, if I buy, if I choose individual stocks, I’ll probably only get index returns rather than outperform.
But after all, if this advice from Warren Buffett is enough for his wife’s inheritance trustee, I think it’s enough!
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Niki Jerath owns a stake in Vanguard S & P 500 ETF. John Mackey, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s Board of Directors. Teresa Kersten, an employee of Microsoft’s subsidiary LinkedIn, is a member of The Motley Fool’s board of directors. The Motley Fool UK recommends Amazon, Apple, and Microsoft. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, given the various insights, A better investor than us.
Do I follow Warren Buffett’s advice on his wife’s money through the S & P 500 ETF?
https://www.fool.co.uk/2021/12/06/should-i-follow-warren-buffetts-advice-for-his-wifes-money-via-an-sp-500-etf/ Do I follow Warren Buffett’s advice on his wife’s money through the S & P 500 ETF?