Warren Buffett has earned a reputation as one of Wall Street's greatest investors. The many acquisitions and stock purchases he has engineered since assuming control of Berkshire Hathaway in 1965 have created immense wealth for shareholders. Berkshire stock has returned 20% annually over the last six decades, while the S&P 500 (SNPINDEX: ^GSPC) has gained 10.4% annually.

Nevertheless, I suspect many investors ignore one of his more prudent recommendations. Buffett has often advised investors to periodically buy and patiently hold an S&P 500 index fund. "I recommend the S&P 500 index fund, and have for a long, long time, to people," he said in 2021.

Here's how that advice could turn a $400 monthly investment into $851,800 over 30 years.

The Vanguard S&P 500 ETF provides exposure to influential companies like Apple, Nvidia, and Tesla

The S&P 500 measures the performance of 500 large and profitable U.S. companies that cover about 80% of domestic equities and 50% of global equities by market value. The Vanguard S&P 500 ETF (NYSEMKT: VOO) tracks the S&P 500, allowing investors to spread capital across many of the most influential businesses in the world.

The 10 largest positions in the Vanguard ETF are listed by weight below:

1. Apple: 6.7%
2. Microsoft: 6.2%
3. Nvidia: 5.6%
4. Amazon: 3.6%
5. Alphabet: 3.5%
6. Meta Platforms: 2.5%
7. Berkshire Hathaway: 2.1%
8. Broadcom: 1.9%
9. Tesla: 1.6%
10. Eli Lilly: 1.5%

Warren Buffett, in his 1993 letter to shareholders, wrote, "By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals." Indeed, only 15% of large-cap funds outperformed the S&P 500 over the last three years, meaning most professional money managers struggle to consistently beat the index.

Buffett added context in his 2016 shareholder letter. "American business -- and consequently a basket of stocks -- is virtually certain to be worth far more in the years ahead." An S&P 500 index fund satisfies that criterion. It is a readymade portfolio comprising hundreds of companies that form the foundation of the United States economy, which itself is the world's most prosperous and innovative large economy, according to JPMorgan Chase CEO Jamie Dimon.

Importantly, the Vanguard S&P 500 ETF has an expense ratio of 0.03%, meaning shareholders will pay $0.30 annually for every $1,000 invested in the fund. Comparatively, the average U.S. exchange-traded fund and mutual fund charged 0.34% last year, according to Morningstar.

The Vanguard S&P 500 ETF can turn $400 per month into $851,800 over three decades

The S&P 500 returned 1,860% in the last 30 years, equivalent to 10.4% annually. That period covers a broad range of market and economic environments, including more than a dozen corrections and three recessions, so investors can reasonably assume similar returns in the next 30 years.

With that in mind, assuming invested dollars compound at 10.4% annually, $400 contributed monthly to the Vanguard S&P 500 ETF would be worth $77,900 in one decade, $287,700 in two decades, and $851,800 in three decades.

Readers may wonder how to contribute $400 per month to the Vanguard S&P 500 ETF when the current share price is $549. There are two options. First, most brokerages support the purchase of fractional shares, meaning you could buy less than one share monthly. Second, for anyone who prefers to buy whole shares, you can simply add $400 to your account each month and make purchases as you accumulate sufficient cash.

Here's the bottom line: S&P 500 index funds (such as the Vanguard S&P 500 ETF) are a cheap and easy way for investors to gain exposure to hundreds of influential stocks, including Apple, Nvidia, and Tesla. Such investment products have created substantial wealth for patient shareholders in the past, and investors have every reason to believe the results will be similar in the future.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This has been a successful strategy.

In 2024, the S&P 500 Index (SP: INX) rose by 23.31% and delivered total returns (including dividends) of 25.02%.

The ASX 200 delivered a healthy but inferior total gross return of 11.44%.

So, it's not surprising that many Aussie investors who have been proactively buying the dip of late have targeted US shares.

Top 10 most traded US shares

New data from online trading platform Stake provides insights into exactly which US shares are on investors' radars most.

The following table shows the 10 most traded US shares on the Stake platform on Monday, 7 April.

That was when we saw the biggest market dip on the ASX last week, with the ASX 200 falling 4.23%. 

That was preceded by one of the biggest falls on the US stock market since the COVID-19 pandemic began in 2020.

On Friday, 4 April, the S&P 500 fell 5.97%.

Largest volume of US stock trades in more than a year

Stake's markets analyst, Samy Sriram, said the volume of total trades of US shares on the Stake Wall St platform was the largest in more than a year on Monday.

Sriram commented:

A large cohort of retail investors saw an opportunity to 'buy the dip,' with the magnificent seven cohort and US index tracking ETFs like VOO seeing significant trading volume.

Sriram said Apple stock saw "the most meaningful increase in buy orders" among Australian investors on Monday.

That may have been because Apple shares were crushed during the US trading sessions on 3 April and 4 April, dropping by 15.86%.

As the table shows, the top 10 US shares traded on Monday had a heavy leaning to the buy side.

This indicates more investors were proactively buying the dip.

However, Sriram noted that sell orders on Tesla shares on Monday were higher than average at 30% of its trades.

This may indicate that some longer-term Tesla investors decided to take their capital gains and run after a difficult period for the stock.

Tesla shares are down 37.5% in the year to date.

Many investors have felt concerned that Tesla CEO, Elon Musk, is too distracted by his new role with the Department of Government Efficiency (DOGE), and this may become detrimental to his EV company.

Interested in ASX shares?

Find out the 10 most popular ASX stocks that Aussie investors are targeting during this market volatility.

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The U.S. stock market has had a rough start to 2025, with all three major indexes (S&P 500, Nasdaq Composite, and Dow Jones) down through March 17.

The tech-heavy Nasdaq Composite is officially in a correction (defined by a drop of 10% or more, but below 20%, from recent highs), the S&P 500 barely escaped its short correction after a 2% one-day gain on March 14, and the Dow Jones is a couple of bad days away from joining them.

Needless to say, the stock market has seen better days. However, the opposite is also true; it has also seen much worse days. Although seeing your portfolio drop is never ideal, now isn't the time to hit the panic button. History tends to repeat itself, and that should encourage investors.

^SPX data by YCharts.

A natural part of the stock market cycle

Corrections and sell-offs are a natural part of the stock market. They've been happening since the stock market became what we know it as today, and you can bet that they'll continue happening.

The reasons for corrections and sell-offs vary. It could be economy-related, politics-related, irrational investor thinking, or a combination of a few things.

Instead of viewing them as setbacks (although they are in some cases), view them as speed bumps and approach them like opportunities to grab high-quality stocks and exchange-traded funds (ETFs) at a discount.

There have always been brighter days after sell-offs

You never want to use past happenings to assume it'll happen in the future in the stock market, but as I mentioned earlier, history tends to repeat itself. And in the case of S&P 500 sell-offs, history shows investors' wealth rebounded from down periods as stocks appreciated.

For perspective, here are the five largest S&P 500 corrections and bear markets since 2000 and how much the index has gained since the trough (the lowest point of the correction or bear market).

Source: Standard & Poor and YCharts. Gains since troughs will vary based on the viewing date.

You'll notice that no matter how much the S&P 500 dropped, it has managed to bounce back over the long haul. That's why it's important to keep a long-term mindset when investing and not get too worked up on short-term volatility regardless of how bad it may seem.

Does that mean the S&P 500 is guaranteed to bounce back this time? No. Is there a very good chance that it eventually does? Absolutely.

How I like to invest in the S&P 500

There are several ways to invest in the S&P 500, but my go-to is the Vanguard S&P 500 ETF (NYSEMKT: VOO) because of its low cost (0.03% expense ratio). This ETF is also a good example of long-term resilience.

Since it was created in September 2010, it's faced its fair share of corrections and down periods. Yet, its long-term returns are impressive.

VOO data by YCharts.

I consider this ETF the foundation of my stock portfolio, so I invest in it using dollar-cost averaging, which essentially involves putting yourself on a set investing schedule. It could be weekly, bi-weekly, monthly, or whatever makes sense for your financial situation.

More important than the frequency of investments is making sure you stick to your investing schedule regardless of how the stock market is performing at the time. Sometimes, you'll be investing when the market is rising; at other times, you'll invest when the market drops.

Since I believe in the long-term potential of this ETF, I don't pay too much attention to its short-term movements. Instead, I focus on investing in it consistently, resisting the urge to time the market, and trusting the power of long-term growth.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Warren Buffett isn't called "the Oracle of Omaha" for nothing. The billionaire has proven his knowledge of the stock market over time, and as a result, Berkshire Hathaway has delivered market-beating performance over 58 years. As chairman, Buffett has helped the holding company generate a compounded annual gain of more than 19% over that time period -- that's compared with about a 10% such increase for the S&P 500.

So, it's clear Buffett generally has made the right decisions at the right times. This often involves going against the current market trends. In the past, this top investor wrote he and his team "attempt to be fearful when others are greedy and to be greedy only when others are fearful."

And it's possible this is what is happening right now. As the S&P 500 climbs, after already completing two years of double-digit gains, and investors pile into high-growth stocks such as artificial intelligence and quantum computing players, Buffett just made a shocking move -- and one that could be seen as a warning to investors. Does this famous investor know something Wall Street doesn't? Let's find out.

A glimpse at the investing moves of experts

Friday was a big day for investors and the stock market in general as it offered them a glimpse into the latest moves of investing experts. Managers of more than $100 million in stocks must file form 13F with the Securities and Exchange Commission, detailing their latest buys and sells, on a quarterly basis. And that form was due this past Friday, February 14.

It would be impossible to follow every move of every billionaire investor, but taking a look at these experts' latest moves could inspire us to make certain decisions that suit our investment strategies -- or offer us a clue about what may happen next in the market. And considering Warren Buffett's excellent long-term track record, it's a fantastic idea to turn to him first.

Before we talk about Buffett's surprising move in the fourth quarter of 2024, though, it's important to quickly discuss his general views on investing. The billionaire is known for value investing, meaning he aims to scoop up shares of companies that are trading for bargain valuations now -- but have what it takes to advance over time. Buffett also has a strong belief that solid American companies will win over the long run, and to gain exposure to these players, he's recommended that non-professional investors add a good S&P 500 Index fund to their holdings.

Buffett's shocking move

Buffett himself has held two -- the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard S&P 500 ETF (NYSEMKT: VOO) -- since the fourth quarter of 2019. But in a shocking move, Buffett in the recent quarter closed out both of these positions.

These funds, mimicking the composition of the S&P 500, offer investors exposure to the benchmark, so they will win or lose according to how the S&P 500 performs. The past two years, as mentioned, have been winning ones. Over time, the S&P hasn't delivered as much of a gain as Buffett's portfolio of carefully chosen stocks, but the index still has been a successful investment.

Today the S&P 500 continues to climb in this bull market, yet Buffett has sold these assets that offer exposure to the index's performance. Does this mean Buffett knows something Wall Street doesn't -- and thinks the index may be heading for a correction?

The market's "casino-like behavior"

We don't know exactly why Buffett made the move, but some may consider this as a warning about the possibility of declines to come. In his most recent shareholder letter, Buffett commented on the "casino-like behavior" in the market. And, knowing Buffett's affinity for value, he's surely noticed the S&P 500 is trading at one of its most expensive levels since it launched as a 500-company index back in the late 1950s. The Shiller CAPE ratio, an inflation-adjusted measure of a company's earnings-per-share and stock price, has reached beyond 35 -- something it's done only twice before.

S&P 500 Shiller CAPE Ratio data by YCharts

So, Buffett may have decided to lock in profits ahead of any potential correction and allocate the funds to individual stocks -- he bought one new stock, Constellation Brands, and added to five positions in the quarter.

Still, Buffett's past comments highlight his belief in the S&P 500's value as a long-term investment and the strengths of American companies. In his 2013 letter to shareholders, he said that in his will he's advised a trustee to put 90% of his cash in an S&P 500 Index fund to benefit his wife.

He also wrote: "American business has done wonderfully over time and will continue to do so."

Now the next question is: What does this mean for you as an investor? Of course, it's impossible for any investor -- even Buffett -- to predict with 100% accuracy what the index will do next. So his decision -- or his team's decision -- to sell the S&P 500 index funds doesn't mean you should stay away from these funds or stocks in general. Instead, it highlights the importance of considering valuations and holding onto quality investments for the long haul. After all, even if the S&P 500 falls in the near future, it's likely to deliver a long-term win for you as it's done for many other investors, including Buffett, throughout its history.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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For many Australians, a mental barrier stands between them and long-term wealth creation. The usual outcome is the 'investing thing' goes in the too-hard basket for another year.

There's a real cost to doing this.

In 2024, it's the missed 10% return from the S&P/ASX 200 Index (ASX: XJO) before dividends; or the forgone 28% from the S&P 500 Index (SP: .INX). But even then, the market can be too overwhelming to tackle despite the fruits it can bear.

Only this weekend was I reminded of this proverbial wall when I was at my local optometrist. After helping me pick out a new set of specs, a friendly man named Nick asked what I do for work. Long story short, he shared a desire to start investing but hadn't taken the plunge yet for a few reasons.

The usual suspects: how to know what's a good investment, what broker to use, etc.

One reason caught my attention. It's a completely valid reason, but I also think it's an entirely solvable one.

'All-in' ASX investment hurdle

Nick made a great point, which took me down memory lane of the first investment I ever made.

Part of Nick's challenge in getting started, and I'm paraphrasing here, was, "If you make your first investment and then it falls 10% or 20%, that's scary!" To which I replied, "Yes, that's definitely true! Especially when you're first starting out with $500, which can be a fair chunk of all the money available to you".

In other words, your first ASX investment can feel high stakes because you're 'all-in' on one company from day one. Now, I'll only speak for myself; my investing prowess was fairly minimal on my first attempt. But that's the norm when trying anything for the first time.

For many, the chance of a $500 investment going bad is too great a mental hurdle to overcome. If I had to guess, that's possibly the big reason Nick and countless other Australians are still staying out of the share market.

But it doesn't need to be this way.

See, the anxiousness here probably comes down to volatility. Big and sudden moves in the value of our money can put more knots in a stomach than a ball of string. We're not biologically programmed to see such choppiness and be emotionless.

Welcome to the rock pool

When I was young, I loved splashing around in the rock pool on Shelly Beach, Ballina, during a family vacation. It meant enjoying the ocean without the thumping waves or the risk of getting washed away.

In a way, index-tracking exchange-traded funds (ETF) are the rock pool of the share market.

The waters are generally calmer; you still get to embrace the perks of investing, and even when a big wave strikes, it will probably be softened through diversification.

The pie charts above illustrate the protection afforded by an ETF. For example, a $500 investment in the Vanguard Australian Shares Index ETF (ASX: VAS) would instantly be dispersed across 300 companies, including:

• $47 in Commonwealth Bank of Australia (ASX: CBA)
• $43 in BHP Group Ltd (ASX: BHP)
• $27 in CSL Ltd (ASX: CSL)
• $263 spread across around 290 other ASX companies

Or, if we wanted to focus on the biggest companies in the United States, a $500 investment in the Vanguard S&P 500 ETF (NYSE: VOO) would be immediately diversified across 500 companies, including:

• $35 in Apple Inc (NASDAQ: AAPL)
• $33 in Nvidia Corp (NASDAQ: NVDA)
• $31 in Microsoft Corp (NASDAQ: MSFT)
• $318 spread across around 490 other U.S. companies

Alternatively, the iShares S&P 500 AUD ETF (ASX: IVV) is an ASX-listed investment that also tracks the top 500 US companies.

Like the training wheels of a bicycle or a parent's hand on our first day of school, an ETF can be the safety net we lean on before we build up enough experience and courage to find our feet.

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Warren Buffett, the longtime CEO of Berkshire Hathaway, oversees a portfolio of investments worth nearly $292 billion. His success in the market over decades continues to captivate the attention of investors hoping to find winning stocks based on his picks.

While replicating Warren Buffett's success isn't possible, there are a handful of his investments that are no-brainer buys no matter what type of investments you're looking for. Here are two of them.

1. Amazon

Berkshire Hathaway added Amazon (NASDAQ: AMZN) to its portfolio in 2019 and currently owns 10 million of the company's shares. Two compelling reasons to buy Amazon right now are the company's dominance in the retail space and its lead in cloud computing.

Amazon holds 40% of U.S. e-commerce market share, far outpacing rival Walmart with just 7.4%, according to eMarketer.

Amazon's massive marketplace generated $95.5 billion in North American revenue in the third quarter (which ended Sept. 30), an increase of 11%. Even more impressive is that the company's total operating income spiked 55% to $15.3 billion.

Additionally, Amazon continues to benefit from its impressive cloud computing business. Amazon Web Services (AWS) sales rose 19% to $27.5 billion in the third quarter and there's likely more growth ahead. AWS is the leading cloud computing company with 31% of the market and Goldman Sachs estimates cloud computing will become a $2 trillion market by 2030, fueled by artificial intelligence (AI) growth.

While Amazon's stock isn't cheap, with a price-to-earnings (P/E) ratio of 45, the company's dominance in the U.S. e-commerce and cloud computing markets continues to make it a compelling investment opportunity.

2. Vanguard S&P 500 ETF

I know putting an exchange-traded fund (ETF) on this list might not be exactly what some readers were expecting. Still, the Vanguard S&P 500 ETF (NYSEMKT: VOO) deserves to be here for several reasons, most importantly because Warren Buffett recommends that most investors own an index fund.

S&P 500 index funds track the growth of the largest 500 publicly traded companies on U.S. stock exchanges. This means that the index fund benefits when the broader market is doing well, no matter what sector is growing. It's one of the easiest ways to invest.

"In my view, for most people, the best thing to do is to own the S&P 500 index fund," Buffett said at the Berkshire Hathaway 2020 annual meeting.

Berkshire Hathaway's large portfolio even includes 43,000 shares of the Vanguard S&P 500 ETF. So, why is one of the world's most successful investors so bullish on S&P 500 index funds? Because they're hard to beat.

Data from Morningstar shows that over the past decade, just 29% of actively managed funds beat their passive-indexed peers. They're also cheap. The Vanguard S&P 500 ETF has a very low expense ratio of just 0.03%.

That means for every $10,000 invested, you'll pay just $3 in expense ratio fees. I can attest to the benefits of the Vanguard S&P 500 ETF, as it's been the largest percentage of my portfolio for years.

For investors looking to follow in Warren Buffett's footsteps, it might be better to follow his advice for most people: Buy an index fund now and hold it for years.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Buffett's only index funds

How they can make you money

The goal of the non-professional [investor] should not be to pick winners -- neither he nor his "helpers" [professional investment managers] can do that -- but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.

The timing is good

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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If there's anyone qualified to define the best investment, it's Warren Buffett. He's the billionaire investor who runs Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), the $600 billion holding company that owns Geico auto insurance, See's Candies, and many more.

In a 2017 interview, Buffett had this recommendation for investors: "I think it's the thing that makes the most sense practically all of the time. ... [to] consistently buy an S&P 500 low-cost index fund." Four years later, Buffett repeated his advice, saying, "I recommend the S&P 500 index fund and have for a long, long time to people."

Owning the S&P 500

An S&P 500 index fund owns all or most of the stocks in the benchmark S&P 500 index. The index, by its own definition, represents "leading companies in leading industries". These leading stocks must meet strict requirements for market capitalization, liquidity, and profitability.

You can buy all stocks in the index individually, but it's far easier to own an S&P 500 index fund, as Buffett recommends. There are many S&P 500 index funds available, and from known fund families like Vanguard, Charles Schwab, Fidelity, State Street's SPDRs, and BlackRock's iShares.

The low-cost index fund

Sticking with Buffett's advice, your best option is a low-cost fund -- or a fund with a low expense ratio. The expense ratio is the percentage of your investment that covers the fund's operating costs.

Vanguard S&P 500 ETF (NYSEMKT: VOO), for example, has an expense ratio of 0.03%. This means you pay $3 annually for every $10,000 you have invested. To be clear, you don't pay this amount directly -- there's no line item on your statement. Those costs are embedded in the fund's returns.

A few bucks a year may not seem like much, but fund expenses cut into your bottom line over time.

Say you want to invest $10,000 annually in an index fund for 20 years. Choose the Vanguard fund that charges 0.03% for expenses, and the projected future value of your investment is $405,506. That assumes a market-average growth rate of 7% per year after inflation.

Alternatively, you could invest the same amount in the Rydex S&P 500 Fund, which has a much higher expense ratio of 2.31%. Your projected balance after 20 years is $320,030 -- some $85,000 less. Shocking, right?

The importance of consistency

In addition to the "low-cost" tip, there's another critical element of Buffett's advice to follow: Invest consistently. He means that literally. Invest what you can each month without fail, regardless of what's happening in the market.

Consistent investing is easier and can be more profitable than timing your trades. It's easier because you make fewer decisions, and you don't have to worry about what the market will do tomorrow or next week. And it helps your gain potential by producing (on average) a lower cost basis, compared to trading only when the market's strong.

Simple investing, the Buffett way

A recurring investment in a low-fee S&P 500 index fund is a simple solution to the complex problem of wealth-building. It almost seems too easy. But history shows that consistent investing in leading US stocks produces returns averaging about 7% annually, after inflation.

At that rate of return, you'll double your money about every 10 years. That sounds pretty promising, right?

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Investing can feel overwhelming when you're just starting. The internet and social media have made it easy to access information, but it can be hard to separate good information from bad.

So if you're looking to begin building a portfolio, where do you start? The S&P 500 is a collection of the 500 most prominent companies in America. Most consider it the 'benchmark' of the broader stock market, and its returns have averaged 10.5% annually since its inception in 1957.

It's straightforward to build wealth using the S&P 500; here is a way you can do it and what you can expect over the long term.

Building a foundation with index funds

It would be best to build a strong foundation for your portfolio that you can slowly add to over time. Like a house, if you build a foundation that crumbles, the whole house will fail. It's similar to investing; you want quality holdings that can steadily build wealth for you over time.

Index funds are a great tool to consider. An index fund is a collection of stocks that trade under a single ticker symbol; it mimics the performance and behavior of an index by design, like the S&P 500, for example.

Index funds are a form of passive investing where investors sit on their hands and let the companies they own do the heavy lifting, which is to grow and increase in value. It can be much less stressful than active investing, where you're frequently buying and selling to optimize your portfolio, and investors usually trade their way to poor returns.

But don't assume that only beginners use index funds and that they're inferior to the hedge funds you often hear about on the news. Famous investor Warren Buffett once successfully bet that a hedge fund manager couldn't outperform a basis S&P 500 index fund over ten years.

An excellent index fund worth considering

An index fund that mimics the S&P 500 should be considered "investing 101" and could be a great backbone for any successful stock portfolio. One of my favorite funds is the Vanguard S&P 500 ETF (NYSEMKT: VOO) which gives you exposure to 500 of the best companies in America through one ticker symbol.

A fund like Vanguard S&P 500 makes investing so simple; you can methodically buy shares over a long enough time and let the most dominant companies in America continue to grow, building wealth for you over time. It's almost like investing on 'autopilot'.

There are people behind these funds who build and maintain them, so they take a tiny percentage of the funds you invest as compensation, called the expense ratio. Investors need to watch expense ratios because a high ratio can add up over time and reduce your total investment returns.

Vanguard S&P 500 has a meager expense ratio, just 0.03%! In other words, you'll pay the fund manager just $3 on a $10,000 investment. Considering how easy the fund makes it to follow the S&P 500, that seems like a terrific deal.

How much can you make?

Your investment returns largely depend on you, specifically -- how much you invest and how long you let it compound in the market. However, here is what you can expect: The S&P 500 returns an average of 10.5% annually, and you can see how well Vanguard S&P 500 has done at mirroring the index.

^SPX data by YCharts.

Generating 10.5% annual investment returns means that your money will double every seven years. Suppose you invest $10,000 today. That means if those returns continue, then you could have $20,000 in seven years, $40,000 in 14 years, and $80,000 in 21 years. Get the point? Stock market returns will probably be "lumpy" in practice, but this is what it averages over multiple decades.

If you invest early and often, your money has more time to multiply. Too many investors start from nothing and try swinging for the fences with risky stocks from day one. Instead, consider building a compounding machine with a fund like Vanguard S&P 500 and watch your wealth grow.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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