The famous and most successful investor of all-time Warren Buffett recommends buying a low-cost index fund spread out over time (dollar-cost averaging).
Specifically, he recommends the Vanguard S&P500 Index Fund.
Of course, there are multiple ways you can take on Buffett’s recommendation to invest in the index fund and we’ll talk about the most popular ones here with a look at pros and cons of each.
Holders of these index funds are typically eligible for dividends when you hold into the Ex-Div Date. Learn more about how ex-div and dividends work here:
Dividends:
More Information:
More on Buffett's best investment advice:
Your video was very helpful. Thank you.
Great video. Very easy to follow. Do you get penalized when you withdraw your money?
It depends. From the Vanguard site: “Some funds charge redemption fees to defray high trading costs. You can find out if your fund charges redemption fees by checking the prospectus or by looking on vanguard.com. Go to our mutual fund list and click the Fees & Minimums link in the top menu of each fund profile page.”
Generally speaking, If it’s a retirement acct yes you get penalized, if it’s a non retirement and it’s after 30 days (best to keep it long term of course) then no.
Good advice , buy the voo and turn off cnbc.
Invest monthly and ignore stock market.
Patient people get all the impatient Peoples money overtime
What would you do with a large lump sum? Invest monthly or go all in?
You’re constantly contradicting themselves by the day
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Very helpful. Thanks for the info!
Good video. I’m 25 and just started investing. My dad is into stocks and he got me started with the s and p 500 etf voo from vanguard. It was really nice because I didn’t have a lot of money to start with and there is no minimum investment. I bought 2000 worth of shares in aug 2017 at 222 and now it’s up to 234 in oct! But the only problem is I want to put a lot more money in and idk if it’s to high to do that. But if I don’t do that it could also just keep going up.
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I also invested in VOO six months ago. And over time I kept putting in money whenever I had the chance. Those investments keep paying off each time because VOO keeps increasing. So I recommend you keep investing.
Trying to figure out best approach are you doing Roth ira or a non retirement account ??
for a low wage earner like myself somehow following this advice and living a frugal life , following my passion for work I’ve done just fine
Same here, play it simple, just max out a ROTH 401k you should be fine
Very helpful- thank you from Newcastle, England. Way to go with Vanguard
ADVICE TO HELP : Also to save on fees etc buy the S&P 500 with the ticker symbol IVV not VOO or SPY in Fidelity commission free. Not Robin Hood etc because big brokerage like Fidelity link everything to help out when doing your taxes. Also if you can’t afford to buy shares monthly historical the best time to buy is first trading day in November. Or just use your tax return every year.
why is there no fees on IVV?
Love how you assume everyone gets a refund on their taxes. Properly self-employed people have to pay a bunch!
This was the exact advice Graham gave in his book, ‘the intelligent investor’. You might be able to beat the index over 2-5 years but in the long run you’re better to invest in a index vanguard if your risk tolerance is low.
That’s not saying you shouldn’t actively invest. Just ensure you invest carefully, with the intention of keeping the shares for 5 years. The issue is the market is now overpriced, so when the crash comes. Be ready to take advantage of the collapse. I’m already profiling companies that look good for stable growth and profits.
I’m glad you included robinhood. Thanks for this. Always great to learn.
Thank you very much for your precious time, Sir! Very Informative and and Practical! You answered almost every single of my questions!
WOW!!! I new to this but this was a great explanation!
I appreciate you sharing this beneficial knowledge.
don’t forget that with Vanguard S&P and Total Stock market–you can open the investor share class and when the balance hits 10,000 you can switch to the admiral class without paying taxes or a fee
that’s awesome! how do you do that? I was going to wait till i have the 10,000 to open the admiral class
but if you can switch from investor share class to admiral no problem i’ll just do that
It happens automatically.
And the exp. Ratio changes too automaticly?
What’s the difference between investor to admiral? Sorry new to all this.
Do you only pay a fee on voo if you sell on TD Ameritrade? Sorry for the lack of intelligence. New investor here.
I’m completely new to investing. I understand the S&P 500 is the go-to ETF for investors, however, there are different S&P 500 from SPY, VOO, and IVV.
My question is, CAN and SHOULD we choose “more than one” of these S&P 500 from all three SPY, VOO, and IVV in our portfolio?
Basically, are there multiple benefits to choosing more than one even though each S&P 500 essentially contains the same 500 indexes (so as not to put all eggs in one basket in case one, either SPY, VOO, or IVV is no longer offered or disappears)?
And what would happen if one of the S&P 500 (either from SPY, VOO, IVV is no longer offered or disappears)? Would the 500 company indexes within that disappeared S&P 500 transfer over to the other S&P 500 ETF? (Example: Pretend SPY is no longer available; would the funds from SPY transfer over to either VOO or IVV, or would the fund automatically be sold?)
I’m sorry I’m just trying to wrap my head around all this being completely new in the investing world and learning all these investing terms.
jasonheman I might be a month late here, but all three of these etfs track the s&p 500. The s&p it self is fairly diverse, it is an index of 500 top businesses. There is no need to buy shares of multiple etfs that track the s&p. What does make a difference is the expense ratio, dividends, and commission rates dependent on your broker.
I own VFIAX through Vanguard and the expense ratio is at .04% and the minimum account opening deposit is only $3,000 now.
Thank you for the insights God be with you 😘
Felicia Berry You are absolutely right, I got confused for a second with the video until I saw your comment. I do have the same as you, I guess the ER back in 2016 was different for the mutual funds and the ETF.
Vanballls. Get fidelity
2 things you should know about Robinhood:
1. It will not allow you top reinvest dividends (and some of those Vanguard funds pay out dividends). If you plan to buy index funds to hold and grow over a long time you want to he able to reinvest div.
2. It is very slow to process orders. So make sure to place limit buys or you may end up buying peaks instead of dips
Jr who cares you can reinvest it straight from your cash value on Robinhood
Thanks for the good info, exactly what I was seeking for. A+
Informative vide. I opened an account with Vanguard $3.2k and plan to hold for retirement (30more years) or close to. I want to reinvest dividends and auto set amount of money monthly. This can only be done with the mutual fund. I want to purchase the S&P 500 index but not sure if mutual fund or ETF. ETF has lower expense ratio but that can be achieved thru mutual fund once I reach $10k. Not completely sure which to go with starting with current small investment. I kind of feel like I’m answering my own question. What do you think?
This is largely what my investment strategy is. Good advice👍
Same 70% into sp 500 10% into nasdaq 20% all international stocks beenholsing it for 4 years now but idk when to sell it cuz i actually not making any profit without seling them so bow i see why people want to invest into dividends