Warren Buffett Has Always Believed in This Simple Strategy. This Vanguard ETF Proves His Point.

Some of us might look at super-successful investors such as Warren Buffett and wonder what complex, esoteric things they must know about the stock market and about how to get rich. In many cases, though, these folks got rich in ways that we can, to a great degree, mimic.

For example, a common investing maxim is to “buy and hold.” (It’s better expressed as “buy to hold,” meaning that you intend to be a long-term investor — as long as the investment remains promising.) Certainly, Warren Buffett believes in that strategy. And if you want to follow suit, Vanguard offers some exchange-traded funds (ETFs) that can help you.

Back in 2016, Buffett offered advice for investors worried about their retirement savings in an interview with CNBC:

I would tell them not to watch the market closely… The money is made in investments by investing… and by owning good companies for long periods of time. If they buy good companies, buy them over time, they’re going to do fine 10, 20, 30 years from now.

How buying and holding has worked for Buffett

Warren Buffett is no longer at the helm of the company he built over 60 years, Berkshire Hathaway (BRKA -1.09%) (BRKB -0.99%), having retired at the end of 2025. But much of Berkshire’s stock portfolio consists of holdings Buffett bought. Here are a few:

Coca-Cola

Buffett first bought into Coca-Cola back in 1988. In his letter to shareholders that year, he noted:

We made major purchases [including] Coca Cola. We expect to hold these securities for a long time. In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.

Look at the Berkshire portfolio today, and you’ll see that Coke is the third-largest holding, recently worth around $30 billion — about 9.3% of the company’s total value. In 2022, Buffett wrote:

In August 1994 — yes, 1994 ––Berkshire completed its seven-year purchase of 400 million shares of Coca-Cola, which we now own. The total cost was $1.3 billion — then a very meaningful sum at Berkshire. The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million.

American Express

Buffett bought into American Express even earlier, in the 1960s. Here’s what he said about it in his 2022 letter:

American Express is much the same story. Berkshire’s purchases of Amex were essentially completed in 1995 and, coincidentally, also cost $1.3 billion. Annual dividends received from this investment have grown from $41 million to $302 million. Those checks, too, seem highly likely to increase.

American Express was recently Berkshire’s second-largest holding, worth nearly $46 billion and representing 22% of the financial services company.

Vanguard ETFs to consider

An ETF you might buy and hold is one Buffett has long recommended: the Vanguard S&P 500 ETF (VOO +0.90%). Hang on to it, and you’ll own 500 of America’s biggest companies. It has averaged about 15% growth annually over the past decade.

It’s the kind of investment you can buy expecting to hold for decades. Any components that perform poorly over time will be removed and replaced by growing businesses. It’s hard to beat.