Most investors admire Warren Buffett as he's proven his investing expertise over many decades. The billionaire, at the helm of Berkshire Hathaway for nearly 60 years, has helped deliver market-beating performance, and this is seen in a compounded annual gain of nearly 20%, compared with a 10% such increase for the S&P 500.
So, it's fair to say that anyone would love to invest like Buffett -- but the trouble is most of us don't have billions of dollars in cash to deploy. I've got some good news for you, though. Yes, a billion-dollar cash pile would be nice, but you don't absolutely have to have one to follow in the footsteps of this investing giant.
In fact, even on a limited budget, you can make a key move to invest like Buffett in 2026. Let's check out this one Buffett-approved asset to add to your portfolio now.
Image source: The Motley Fool.
Buffett's stock-picking strength
You might already know this, but Buffett is much-admired for his stock-picking abilities, and this has helped grow his portfolio to its current level of more than $257 billion. Buffett doesn't buy into trends, and instead looks for quality companies trading for less than what they truly are worth. He strongly values moats, or competitive advantages, and smart management -- and he appreciates companies that reward investors with dividend payments.
When he finds companies that have all of this, he buys and holds on for the long term. Good examples across industries include Coca-Cola, American Express, and Apple -- they are among Buffett's leading positions, and he's owned them for years.
Even though Buffett strongly values stock picking, he has coupled it with another move in the past, and this is a move he recommends for every "non-professional" investor. This involves one asset that can offer you exposure to "a cross-section of businesses that in aggregate are bound to do well," according to Buffett. And here he refers to American companies as Buffett has always expressed confidence in U.S. businesses overall.
Buffett's view of American companies
"American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts)," Buffett once wrote in a shareholder letter.
Buffett has in the past invested in this one particular asset that offers you instant access to the best of American companies, and he even says that he's advised trustees, upon his death, to put most of his cash into this asset for the benefit of his wife.
I'm talking about a fund that tracks the S&P 500, particularly a low-cost one such as the Vanguard S&P 500 ETF (VOO -0.38%). This fund has an expense ratio of only 0.03%, and at well below the level of 1%, fees won't eat into your returns over time. And trading for just over $600, you can get in on this investing opportunity with a limited budget.
NYSEMKT: VOO
Key Data Points
Exchange-traded funds, or ETFs, allow you to gain access to many companies with just one purchase, offering you instant diversification. With the Vanguard S&P 500 ETF this diversification is across the companies powering today's economy -- and since the index and funds that track it rebalance regularly, this investment guarantees that you'll always be invested in the most significant companies of the day.
As mentioned, Buffett built his fortune thanks to his ability to select great stocks, and stock picking is an essential part of wealth-building. But, if you're on a budget, or even if you aren't and simply aim to add another source of strength to your portfolio, getting in on the Vanguard S&P 500 ETF is a smart move. As Buffett says, American companies have generated major growth for investors over time and have the ability to keep this going -- and buying this ETF will help you benefit from this and invest like Buffett in 2026.
