The One Warren Buffett ETF to Consider Investing In Before the End of 2024

The end of the year is often a great time to review your investments and possibly enhance your portfolio by adding more stocks or funds.

Exchange-traded funds (ETFs) offer a straightforward way to invest in numerous stocks at once, making them an excellent option for those who lack the time or inclination to research individual stocks extensively.

With a plethora of ETFs on the market, each with distinct advantages and disadvantages, choosing the right one can be challenging. Nonetheless, there is one ETF endorsed by Warren Buffett that I intend to invest in before the year concludes.

A robust investment to safeguard your portfolio

One of Warren Buffett's top recommendations is the S&P 500 ETF. This ETF comprises all the stocks listed in the S&P 500 index, which encompasses 500 of the largest and most economically solid companies in the United States.

By purchasing a single share of an S&P 500 ETF, investors can gain exposure to hundreds of stocks across a wide array of industries. This instant diversification minimizes risk while reducing the effort typically required to buy multiple individual stocks.

Since the S&P 500 is limited to large-cap companies, it includes well-known giants such as Apple, Amazon, and Nvidia, as well as established firms like Procter & Gamble, 3M, and Coca-Cola. Thus, if you wish to invest in leading corporations across various sectors, an S&P 500 ETF is a sound choice.

Buffett's endorsement reinforces its credibility

Warren Buffett, through his company Berkshire Hathaway, holds two prominent S&P 500 ETFs: the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY).

In a notable challenge a few years ago, Buffett famously bet $1 million that an S&P 500 index fund would outperform a selection of five actively managed hedge funds over ten years.

The outcome of this bet showed that Buffett's investment yielded returns close to 126%, while the hedge funds’ performance ranged from a mere 2.8% to 87.7%. Collectively, the hedge funds averaged returns of about 36% over the same decade.

In his annual letter to Berkshire Hathaway shareholders after the wager, Buffett remarked that nothing extraordinary occurred in the stock market during that decade and stressed that successful investing relies more on simple principles than on advanced strategies.

Long-term gains could be substantial

The S&P 500 ETF is generally considered a safe investment, but with time and consistency, it can lead to significant financial gains.

Historically, the S&P 500 has generated an average return of roughly 7% per year. It's important to maintain a long-term perspective with this type of investment, as year-to-year returns can vary widely. However, over decades, those fluctuations tend to balance out.

If you were to invest $200 monthly into an S&P 500 ETF, achieving a 7% average annual return could result in the following portfolio values over time:

Years	Portfolio Value
20	$98,000
25	$152,000
30	$227,000
35	$332,000
40	$479,000

As evidenced, the more time your investments have to grow, the more potential you have for earning significant returns. Regardless of how much you can afford to contribute each month, starting early can greatly enhance your overall returns.

Time and consistency are crucial in investing. The S&P 500 ETF is an excellent option for those seeking a reliable and safer investment. By taking advantage of this Buffett-endorsed ETF sooner rather than later, you might realize greater earnings than you initially anticipated.

investment, ETF, Buffett