Now, this doesn’t necessarily mean that a bear market or recession is around the corner. But it’s more important than ever to ensure you’re investing in strong long-term stocks and funds<\/a>. There’s one investment Buffett has strongly recommended for decades, and history proves he’s been right every single time. <\/p>\n For decades, Warren Buffett has recommended the S&P 500 ETF. During Berkshire Hathaway’s 2020 meeting, he even went so far as to call it “the best thing” for most investors. <\/p>\n In 2008, he also made a $1 million bet that this type of investment could outperform a group of actively managed funds. After 10 years, his S&P 500 fund had earned total returns of nearly 126%, while the five actively managed funds averaged a total return of around 36%. <\/p>\n History backs up Buffett’s approval of the S&P 500 ETF, too. Analysts at Crestmont Research studied the S&P 500’s long-term performance and found that since the index’s inception, it’s ended every 20-year period with positive total returns regardless of how volatile the market was during that period. <\/p>\n In other words, by holding an S&P 500 ETF for at least 20 years, it’s historically been harder to lose money with this investment than it is to make money. <\/p>\n Two risks to consider before buying <\/p>\n One potential downside to the S&P 500 ETF is that it’s becoming increasingly dominated by tech stocks<\/a>, making it more vulnerable to volatility. <\/p>\n For example, the “Magnificent Seven” — which includes Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla — make up around one-third of the S&P 500’s total value, making the S&P 500 ETF more easily swayed by megacap tech companies. If those stocks are thriving, it can lift the S&P 500 to new heights. But if they falter, they can drag the entire index down with them. <\/p>\n Story Continues <\/p>\n With a long enough timeline, this may not be an issue for many investors, as most leading companies can recover from downturns and achieve long-term growth. But it can result in more short-term volatility than some investors expect, so it’s an important factor to consider. <\/p>\n The other potential downside is that because the S&P 500 ETF tracks a major market index, it’s impossible for it to beat the market. Over time, even a seemingly minor difference in performance can add up. <\/p>\n Let’s say you’re investing $200 per month in an S&P 500 ETF earning a 10% average annual return — which is in line with the S&P 500’s historic average. Let’s also say that you could invest $200 per month in a growth ETF earning a marginally higher 11% average annual return. Over decades, here’s approximately how much you could earn in total with each investment: <\/p>\n Data source: Author’s calculations via investor.gov. <\/p>\n No investment is perfect, and the S&P 500 ETF won’t be the ideal fit for everyone, especially investors nervous about the tech industry’s volatility or looking to maximize their earnings in the stock market. <\/p>\n However, there’s good reason why Warren Buffett highly recommends the S&P 500 ETF. It shines with its consistency over decades, and even while earning average returns, it’s still possible to accumulate hundreds of thousands of dollars with this investment. <\/p>\n Should you buy stock in S&P 500 Index right now? <\/p>\n Before you buy stock in\u00a0S&P 500 Index, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0S&P 500 Index\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $395,679!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,294,805!* <\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by 4x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of July 11, 2026. <\/p>\n Katie Brockman<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Image source: The Motley Fool. A failsafe long-term investment <\/p>\n
<\/a> ^SPX<\/a> data by YCharts.<\/a> <\/p>\n
<\/a> ^SPX<\/a> data by YCharts.<\/a> <\/p>\n