Warren Buffett Stepped Down, but His Timeless Investment Advice Can Help You Build Wealth for Years to Come

2 hours ago 1

Anthony Di Pizio, The Motley Fool

Wed, January 14, 2026 astatine 5:50 AM CST 5 min read

He has often said buying a low-cost scale money similar the Vanguard S&P 500 ETF is the champion mode for individuals to physique wealthiness implicit the agelong term.
Although the scale is precise top-heavy, with one-third successful tech stocks, it's highly diversified, too.
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Warren Buffett served arsenic the main enforcement serviceman of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) from 1965 until the extremity of 2025, erstwhile helium stepped down. During his 60-year tenure, helium transformed Berkshire from a struggling textiles shaper into a $1 trillion conglomerate with much than 60 wholly owned subsidiaries, and number stakes successful much than 40 different companies.

Berkshire banal delivered a compound yearly instrumentality of 19.7% during Buffett's clip arsenic CEO, which would person been capable to crook a specified $500 concern successful 1965 into $24.2 cardinal today. Buffett knows that emblematic investors would conflict to replicate his success, truthful helium often recommends they bargain a low-cost S&P 500 scale money alternatively of trying to prime idiosyncratic stocks.

In a 2013 missive to shareholders, helium specifically recommended the Vanguard S&P 500 ETF (NYSEMKT: VOO) due to the fact that of its ultra-low fees. Here's however this exchange-traded money tin assistance physique wealthiness for decades.

Warren Buffett smiling, surrounded by cameras.

The S&P 500 is America's astir wide followed banal marketplace scale due to the fact that of its divers composition, with 500 companies from 11 economical sectors represented. It is rebalanced quarterly, erstwhile stocks that nary longer conscionable its strict criteria are removed and replaced with much suitable candidates.

To suffice for inclusion successful the index, a institution indispensable beryllium profitable, and it indispensable person a marketplace capitalization of astatine slightest $22.7 billion, among different things. But adjacent aft ticking each of those boxes, a peculiar committee makes the last decision, which ensures lone the highest prime companies marque the cut.

The S&P 500 is weighted by marketplace capitalization, meaning the astir invaluable companies successful the scale person a greater power implicit its show than the smallest. That's wherefore accusation exertion is the largest of the 11 sectors, with a weighting of 33.7% -- it's location to Nvidia, Apple, Microsoft, and Broadcom, which person a combined marketplace headdress of $13.5 trillion.

The adjacent 3 largest S&P 500 sectors are arsenic follows:

Financials (13.5%), which includes companies similar Berkshire Hathaway, JPMorgan Chase, and Visa.
Consumer discretionary (10.6%), which is location to Amazon, Tesla, and McDonald's.
Communication services (10.5%), which features Alphabet, Meta Platforms, and Netflix.