While many individual stocks have started to bounce back from this latest downturn, the major market indices, such as the S&P 500 and Nasdaq Composite, continue to trade well below their recent highs. This represents a great opportunity for investors who have been on the sidelines to begin investing.
It feels ironic to posit that an exchange-traded fund (ETF) Warren Buffett just sold out of could be the smartest investment you could make, but even the Oracle of Omaha himself might agree. He has said many times that most investors should invest in an ETF that tracks the S&P 500, and individual investors shouldn't make the mistake of comparing their personal portfolios to Berkshire Hathaway, which manages billions in its equity portfolio and has different investing goals.
Since my last analysis of SPY and VOO, I have become more concerned about the odds of a soft landing scenario. My concerns include the inverted yield curve, relatively high borrowing rates, elevated delinquency rates, and also persisting inflation. The combination of these factors significantly diminishes the odds of a soft landing.
The Vanguard S&P 500 ETF (VOO -1.09%) is one of the largest and most popular exchange-traded funds (ETFs) on the stock market. It tracks the S&P 500 (^GSPC -1.07%) market index with minimal fees and laser-like precision.
The stock market is very good at building wealth in the long run. The growth may slow down for a few years after huge challenges such as world wars, oil crises, and the end of the dot-com bubble.
Volatile stock prices are worrying investors right now. Amid rising threats of trade wars and an increasing number of economists talking about the potential for a recession, investors have been left trying to piece together what the best investment strategy is.
ETFs pulled in $22.3 billion in capital last week, with VOO and SPY leading the way.
The past month has probably been stressful for many investors. The S&P 500 index, arguably the most common placeholder for the U.S. stock market, has declined over 8%, flirting with a technical correction (10% decline from peak).
[00:00:04] Doug McIntyre: One of the things that people have to remember and this is sort of a Warren Buffett thing If you have a big stock market sell off, the temptation is to take stocks that have gone up a lot and, you know, sell them.
[00:00:04] Doug McIntyre: Where do people go when the market falls apart?
It's been a tough month or so for stocks, with the major U.S. stock indexes falling sharply from their earlier highs. The market has been rattled with the threats of tariffs and a growing sense that the U.S. is headed toward more isolationist policies as it pulls back from its allies.
Warren Buffet, long famous for advising retail investors to buy and hold low-cost index funds, revealed in a recent filing that his holding company had exited the Vanguard S&P 500 ETF NYSEARCA: VOO. Berkshire Hathaway sold its entire position in both VOO and its only other S&P 500 index fund in the fourth quarter of 2024 in a move that has investors questioning the value of top tech players in the index.