Warren Buffett’s reported advice for most people was to own an S&P 500 index fund. The “never lost money” claim is about historical returns across 20-year holding periods—not a promise that an investment will never fall. Berkshire Hathaway’s own account of Buffett’s index-fund wager shows the fund lost 37.0% in 2008.
What Buffett reportedly recommended
At Berkshire Hathaway’s 2020 virtual annual meeting, Buffett was quoted as saying: “In my view, for most people, the best thing to do is to own the S&P 500 Index Fund… You’re dealing with something fundamentally advantageous, in my view, in owning stocks. I will bet on America the rest of my life.” The statement was reproduced in a contemporary report; it does not name a particular ETF such as VOO or SPY. The Motley Fool’s 2026 article presents the claim in the headline, but the available evidence establishes this reported advice—not that it was Buffett’s only recommendation over more than 60 years.
What the “never lost money” statistic actually says
The 2026 article reports that an analysis attributed to Crestmont Research examined 107 rolling 20-year periods for the S&P 500. It says every period had a positive average annual total return when dividends were included. The article does not specify the dataset’s publication year, and the underlying analysis was not independently reviewed here. This is a historical result for those long holding periods, not a forecast or a guarantee for future investors.
“Positive average annual return” also does not mean the investment rose every year—or that an investor could not lose money by selling sooner. An index fund’s value can decline substantially during market downturns, and a person’s result depends on when they buy and sell, whether they reinvest dividends, and the fund’s costs.
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The catch: the fund has suffered steep losses
Berkshire Hathaway’s 2016 shareholder letter included the S&P index fund’s return for each year of Buffett’s wager against hedge funds. The table shows a 37.0% loss in 2008. That decline is compatible with a positive result across a particular 20-year period: long-run averages can include severe losses along the way. Someone who needed to sell during a downturn could lock in a loss.
That is why “never lost money” should not be read as “cannot lose money.” A long historical horizon does not remove market risk, guarantee recovery on an investor’s timetable, or make stock funds appropriate for money that must remain stable in the short term.
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What Buffett’s wager does—and does not—show
Buffett’s ten-year wager compared a low-cost Vanguard S&P index fund with five hedge-fund funds-of-funds. In Berkshire’s 2017 shareholder letter, he explained the wager as an argument about the drag that high fees and active management can impose over time. It supports the broader case for considering low-cost index investing; it does not prove that one S&P 500 fund is right for every investor, or that an S&P 500 fund is the only sensible investment.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Choosing an S&P 500 fund is a separate decision
The reported 2020 advice names an index-fund category, not a specific ticker. The 2026 article cites VOO and SPY as examples and reports expense ratios of 0.03% for VOO and 0.0945% gross for SPY. Those are figures reported by that article, not confirmed current issuer terms; expense ratios can change. Check each fund issuer’s current disclosures before investing. Expense ratio is only one comparison point, and the cited figures alone do not establish differences in tracking, taxes, trading costs, account access, or suitability.
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