This Is the 1 ETF Warren Buffett Recommends Most People Buy -- and History Says He's Always Been Right

Berkshire Hathaway’s long-time CEO and chief stock-picker suggests most investors buy and hold the simplest of index funds.

He doesn’t follow this advice for Berkshire’s portfolio for a very specific but important reason.

Data indicates that the statistical odds of managing a stock portfolio that outperforms the overall market are actually quite low.

You know him as one of the world's best stock-pickers. That's not how he recommends most people build wealth, however. Rather than taking on the risk of managing a portfolio of individual stocks, Warren Buffett believes most investors are better served by buying and holding a simple index fund; his suggestion is the Vanguard S&P 500 ETF (NYSEMKT: VOO) , which is designed to mirror the S&P 500 (SNPINDEX: ^GSPC) .

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Buffett's made the suggestion more than once. He couldn't have been any clearer about his feelings, however, than he was at Berkshire Hathaway 's (NYSE: BRKA) (NYSE: BRKB) 2021 shareholder meeting, when he plainly said "for most people, I think that the best thing to do is buy an S&P 500 index fund ," (although it was in 2013's letter to Berkshire shareholders that he specifically recommended Vanguard's S&P 500 fund).

So why does he preach what he doesn't practice? A couple of reasons.

One of them is the purpose of Berkshire Hathaway itself. Berkshire Hathaway isn't Mr. Buffett's personal retirement nest egg. It's first and foremost an insurance company that needs reliable dividend income that only individual stocks can provide. In this vein, Berkshire owns a number of privately held businesses that also generate reliable cash flow.