Warren Buffett, that grand maestro of capital symphonies, once transformed a floundering textile concern called Berkshire Hathaway (BRK.A) (BRK.B) into a $1 trillion empire. His secret? Realizing textiles were about as viable as a chocolate teapot and pivoting to buying excellent companies, then politely waiting decades. Now, while his methods resemble alchemy more than arithmetic, he acknowledges most mortals shouldn’t try this at home. Instead, he waved a fondue fork at the Vanguard S&P 500 ETF (VOO) in 2014, declaring it a better bet than chasing stock-picking mirages. (This is akin to telling someone they shouldn’t build a spaceship to visit Alpha Centauri when a bicycle will get them to the corner shop.)
The S&P 500, that venerable club of 500 corporations, operates under rules so specific it makes the selection process for the Wimbledon finals look positively casual. A company needs $22.7 billion in market cap, profitability, and a U.S. exchange listing-though final approval rests with a committee that meets quarterly, presumably in a mahogany-paneled room with velvet curtains and a ouija board.
A universe of diversification, slightly lopsided
The index spans every economic sector, though tech titans Nvidia, Microsoft, and Apple now account for 11.7 trillion reasons why “diversification” is a relative term. Here’s the breakdown:
| Sector | S&P 500 Sector Weighting | Noteworthy Stocks |
|---|---|---|
| Information technology | 33.9% | Nvidia, Apple, Microsoft |
| Financials | 13.6% | Berkshire Hathaway, JPMorgan Chase, Visa |
| Consumer discretionary | 10.7% | Amazon, Tesla, McDonald’s |
| Communication services | 10.6% | Alphabet, Meta Platforms, Netflix |
| Healthcare | 8.8% | Eli Lilly, Johnson & Johnson, AbbVie |
Investing in VOO is like owning a tiny slice of every economic pie-except the tech sector pie has been baked in a supernova and now occupies its own solar system. But Buffett’s advice, delivered in 2014, was a masterclass in “set it and forget it” investing, assuming your definition of “forget” includes occasionally checking your brokerage account to confirm it hasn’t been vaporized by a rogue asteroid.
Eleven years of compound interest: The universe’s favorite magic trick
Since Buffett’s nod, VOO has delivered 13.4% annualized returns-a figure so cheerful it borders on offensive to those who’ve tried gardening or candle-making as revenue streams. A $10,000 investment would now be worth $43,000, assuming dividends were reinvested. This is the financial equivalent of planting a beanstalk and finding it sprouted into a skyscraper.
For those who dollar-cost averaged (fancy term for “sending money into the void monthly”), the numbers sparkle:
| Monthly Investments (Starting In February 2014) | Total Contributions | Balance In 2025 |
|---|---|---|
| $100 | $13,900 | $33,434 |
| $500 | $69,500 | $167,172 |
| $1,000 | $139,000 | $334,345 |
Now, about fees: VOO’s 0.03% expense ratio is so tiny it could be mistaken for a rounding error. Vanguard notes competitors average 0.74%-a difference that, over decades, becomes as significant as the gap between a campfire and a supernova. The SPDR S&P 500 ETF Trust (SPY), meanwhile, charges 0.09%, which is like charging extra for ice in your martini when you’re already paying for the gin.
Of course, the S&P 500’s recent 13.4% returns beat its long-term 10.5% average, thanks to AI’s nascent rise and tech’s galactic dominance. Whether this continues depends on whether you believe AI will solve all problems or just create new ones (spoiler: both). Still, Buffett’s advice remains-VOO is the financial equivalent of wearing a seatbelt in a rocket ship: it won’t stop all disasters, but it improves your survival odds.
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2025-09-25 12:36