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Katie Brockman, The Motley Fool
Mon, April 20, 2026 astatine 7:35 AM CDT 5 min read
There are fewer investors whose words transportation arsenic overmuch value arsenic Warren Buffett. The banal marketplace fable is celebrated for offering proposal passim his decades-long career, helping mundane investors physique lifelong wealth.
While Buffett whitethorn beryllium known for his stock-picking ability, his proposal for others is amazingly simple. There's 1 scale money helium heavy recommends, and it could assistance you physique a portfolio worthy $1 cardinal oregon much portion hardly lifting a finger.
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For investors seeking to physique semipermanent wealthiness with minimal effort, Buffett highly recommends buying an S&P 500 scale fund. In fact, successful Berkshire Hathaway's 2020 shareholder meeting, Buffett went truthful acold arsenic to accidental that it's "the champion thing" for astir investors.
He besides backed up his proposal successful 2008 with a $1 cardinal stake that an S&P 500 scale money could outperform a radical of 5 actively managed hedge funds. After 10 years, his concern had earned full returns of astir 126%. The 5 hedge funds averaged returns of conscionable 36%, and adjacent the highest-earning money lone earned full returns of astir 88%.
There are a fewer reasons wherefore an S&P 500 scale money is specified a coagulated choice:
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It offers stellar diversification: Most experts urge investing successful astatine slightest 25 stocks crossed aggregate industries to decently diversify your portfolio. Each S&P 500 scale money holds astir 500 stocks crossed each assemblage of the market, offering ample diversification that tin assistance bounds hazard during periods of marketplace volatility.
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It boasts a century's worthy of history: Past show doesn't foretell aboriginal returns, but the S&P 500's extended past of surviving turbulence tin connection investors immoderate bid of mind. The scale itself has not lone pulled done each recession, crash, and carnivore marketplace it's ever faced, but it's besides earned affirmative full returns implicit decades contempt volatility.
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It's a hands-off investment: An S&P 500 scale money performs champion erstwhile fixed arsenic overmuch uninterrupted clip arsenic imaginable to grow. This means investors ne'er request to interest astir buying oregon selling astatine conscionable the close moment, and due to the fact that each of the stocks successful the money are already chosen, this concern requires overmuch little probe than buying idiosyncratic stocks.
An S&P 500 scale money is specified a unchangeable concern that, historically, it's proven harder for semipermanent investors to lose wealth with 1 than to gain money.
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