Warren Buffett Endorses Vanguard's $VOO S&P 500 ETF for Young Investors

Warren Buffett's advice for ordinary investors comes down to one fund: a low-cost S&P 500 index fund. In his 2013 letter to Berkshire Hathaway ($BRK.B) shareholders, Buffett wrote that his estate's trustee should put 90% of cash in a very low-cost S&P 500 index fund, naming Vanguard specifically. That fund is the Vanguard S&P 500 ETF ($VOO).
According to the article, Buffett is not saying he cannot pick stocks. He is saying most investors do not have the cash flow that lets Berkshire hold stocks through long downturns without being forced to sell, and that active fund fees compounded over decades leave most investors worse off.
Key details on $VOO:
- Tracks the S&P 500, holding roughly 500 of the largest U.S. companies
- Expense ratio of 0.03% per year, or $3 annually on a $10,000 balance
- Pays quarterly dividends
- Heavily weighted toward technology, so it falls when that sector sells off sharply
The article notes the 90% stock and 10% bond split was for Buffett's estate, not a universal prescription. It suggests building an emergency fund of three to six months of expenses first and capturing any employer 401(k) match. The 2026 Roth IRA contribution limit is $7,500, and automatic contributions on a fixed schedule remove the timing decision.