Warren Buffett famously quipped that diversification is for people who don't know what they're doing. Judging by the explosive growth of S&P 500 ETFs over the past few decades, millions of investors are perfectly fine playing dumb — and their retirement accounts are thanking them for it.
After all, beating the market year after year is incredibly hard. Even Warren Buffett couldn't do it consistently. He's considered the GOAT of long-term investing for good reason. Between 1964 and 2024, Berkshire Hathaway (BRK.B) delivered an overall gain of more than 5,500,000%, or a compound annual gain of nearly 20%. By comparison, the S&P 500, the main benchmark for U.S. stocks, gained 39,000% and 10%, respectively.
