What is Warren Buffett's favorite ETF?
Warren Buffett has long recommended the S&P 500 index fund and ETF, and through his holding company Berkshire Hathaway, he also owns two of these types of investments: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).
If you don't, then dollar-cost average into index funds.” Buffett has long advised most investors to use index funds to invest in the market, rather than trying to pick individual stocks. By picking individual stocks you're working against the pros who have extensive intelligence on companies.
Average Return. In the past year, QQQ returned a total of 30.97%, which is significantly higher than VOO's 21.42% return. Over the past 10 years, QQQ has had annualized average returns of 17.90% , compared to 12.29% for VOO. These numbers are adjusted for stock splits and include dividends.
Performance Comparison of VOO vs. VT. The total return performance including dividends is crucial to consider when analyzing different investment funds. As of 1/15/2024, VOO has a one year annualized return of 26.25%, while VT has a five year annualized return of 21.90%.
Rule 1: Never lose money.
By following this rule, he has been able to minimize his losses and maximize his returns over time. He emphasizes this so much that he often says, “Rule number 2 is never forget rule number 1.”
| Stock | Number of Shares Owned | Value of Stake |
|---|---|---|
| Coca-Cola (NYSE:KO) | 400,000,000 | $23.8 billion |
| Chevron (NYSE:CVX) | 126,093,326 | $18.9 billion |
| Occidental Petroleum (NYSE:OXY) | 248,018,128 | $15.1 billion |
| Kraft Heinz (NASDAQ:KHC) | 325,634,818 | $11.3 billion |
Buffett is also uninterested in gold. In his 2011 letter to shareholders, he noted that gold has two significant shortcomings, “being neither of much use nor procreative.” “If you own one ounce of gold for an eternity, you will still own one ounce at its end.
QQQ usually declines more in bear markets, has high sector risk, often appears overvalued, and holds no small-cap stocks. This ETF allows traders to invest in the largest 100 non-financial companies listed on the Nasdaq.
VOO has a conensus rating of Moderate Buy which is based on 398 buy ratings, 100 hold ratings and 7 sell ratings.
| Ticker | Company | Performance (Year) |
|---|---|---|
| VGT | Vanguard Information Technology ETF | 30.75% |
| VFMO | Vanguard U.S. Momentum Factor ETF | 27.30% |
| VOOG | Vanguard S&P 500 Growth ETF | 26.64% |
| MGC | Vanguard Mega Cap 300 Index ETF | 25.51% |
Why choose VTI over VOO?
Here's a summary of which one to choose:
If you want to own only the biggest and safest stocks, choose VOO. If you want more diversification and exposure to mid-caps and small-caps, choose VTI. If you can't decide, consider simply buying both of them (assuming that commissions are low or free).
| Symbol | Name | 5-Year Return |
|---|---|---|
| SCHG | Schwab U.S. Large-Cap Growth ETF | 17.63% |
| XMHQ | Invesco S&P MidCap Quality ETF | 17.26% |
| MGK | Vanguard Mega Cap Growth ETF | 17.21% |
| YCS | ProShares UltraShort Yen | 17.17% |
Many people pair VOO with the Vanguard Total Bond Market ETF (BND) in a broader portfolio. The fixed income ETF has $95 billion in assets and is the largest bond ETF trading in the U.S. BND has two-thirds of its assets in U.S. government bonds, with most of the remainder in investment-grade corporate bonds.
A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.
Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.
Buffett's Two Lists is a productivity, prioritisation and focusing approach where you write down your top 25 goals; circle your 5 highest priorities; then focus on those 5 while 'avoiding at all costs' doing anything on the remaining 20.
- Palo Alto Networks Inc. (ticker: PANW)
- Nvidia Corp. (NVDA)
- Apple Inc. (AAPL)
- Microsoft Corp. (MSFT)
- Alphabet Inc. (GOOG)
- Tesla Inc. (TSLA)
- AllianceBernstein Holding LP (AB)
- Walt Disney Co. (DIS)
| Ticker | Company | Number of Shares |
|---|---|---|
| BRK.B | Berkshire Hathaway Inc. | 19,916,349 |
| CNI | Canadian National Railway Co. | 54,826,786 |
| WM | Waste Management Inc. | 35,234,344 |
| CAT | Caterpillar Inc. | 7,353,614 |
In addition to Occidental, Buffett also likes Apple Inc. (NASDAQ:AAPL), Coca-Cola Co (NYSE:KO) and Chevron Corp (NYSE:CVX). Click to continue reading and see Warren Buffett 2024 Portfolio: Top 5 Stock Picks.
Warren Buffett has been very vocal about his disdain for gold as an investment. He sees little to no value in it. What Buffett refers to as a lack of value results from a lack of usefulness. He once stated about gold, "It doesn't do anything but sit there and look at you."
What gold stock does Warren Buffett own?
Given Buffett's aversion to gold, market watchers were understandably surprised when Berkshire Hathaway invested in Barrick Gold (TSX:ABX,NYSE:GOLD) in Q2 2020, paying around US$560 million for about 21 million shares of the major gold miner.
Things that don't depreciate in value are things that don't lose their qualities as time passes or things that actually increase in value with the passage of time. These include goodwill, luxurious items, high-quality art, gems, alcoholic beverages, and land.
| Ticker | Fund name | 5-year return |
|---|---|---|
| SOXX | iShares Semiconductor ETF | 30.70% |
| XLK | Technology Select Sector SPDR Fund | 24.57% |
| IYW | iShares U.S. Technology ETF | 24.09% |
| FTEC | Fidelity MSCI Information Technology Index ETF | 22.79% |
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Invesco QQQ Trust (QQQ) | $259 billion | 0.20% |
| Vanguard High Dividend Yield ETF (VYM) | $55 billion | 0.06% |
| Vanguard Total International Stock ETF (VXUS) | $69 billion | 0.08% |
| Vanguard Total World Stock ETF (VT) | $35 billion | 0.07% |
- ProShares Bitcoin Strategy ETF (BITO)
- Invesco QQQ Trust (QQQ)
- Vanguard Information Technology ETF (VGT)
- VanEck Semiconductor ETF (SMH)
- Invesco S&P MidCap Momentum ETF (XMMO)
- SPDR S&P Homebuilders ETF (XHB)
- Invesco S&P 500 GARP ETF (SPGP)
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