Warren Buffett has spent years telling anyone who will listen that they should just buy a low-cost index fund and go play golf. It's basically his gospel. So, when the news broke that Berkshire Hathaway actually dumped its remaining stakes in the Vanguard S&P 500 ETF (VOO) and the SPDR S&P 500 ETF Trust (SPY), it felt a little like finding out your nutritionist was spotted at a late-night donut shop.
Is he changing his mind? Not really. But the timing of when Warren Buffett sells S&P index funds tells a much louder story about where he thinks the market is heading than any of his cheery shareholder letters ever could.
The Oracle of Omaha isn't just trimming around the edges anymore. He’s been on a selling spree that would make a minimalist proud.
The Quiet Exit from Passive Investing
Berkshire Hathaway’s 13F filings, which are basically the "cheat codes" Wall Street uses to see what the big guys are doing, revealed that the firm completely exited its S&P 500 ETF positions in the fourth quarter of 2024. Now, to be fair, these weren't massive positions for a guy like Buffett. We’re talking about a combined value of roughly $40 million to $50 million. For most of us, that's retirement on a private island; for Berkshire, that’s basically the change found between the couch cushions.
But the symbolism? That’s huge.
For years, Buffett held these small index positions almost as a proof of concept. He even won a famous million-dollar bet against hedge fund managers by proving that a simple S&P 500 index fund would outperform a hand-picked basket of expensive funds. By selling them now, he’s signaling that even "the market" isn't a good deal at current prices.
A Mountain of Cash and Nowhere to Go
If you want to know how Buffett really feels, don't look at his words—look at his cash pile. As of the end of the third quarter of 2025, Berkshire Hathaway is sitting on a record-shattering $381.7 billion in cash and equivalents.
That's an insane amount of money.
To put it in perspective, $382 billion is enough to buy companies like Netflix, Disney, or even the entire market cap of most S&P 500 companies outright. Instead, Buffett has parked the vast majority of it in U.S. Treasury bills. Why? Because right now, sitting on the sidelines is actually paying him. With Treasury yields hovering around 5%, Berkshire is essentially earning $20 billion a year just for doing nothing.
It's the ultimate "I'll wait for a better deal" move.
What else has he been dumping?
The S&P 500 index funds weren't the only things to get the axe. 2024 and 2025 have seen a massive liquidation of Berkshire’s most beloved holdings:
- Apple (AAPL): He offloaded a staggering 73% of his position by the end of 2025.
- Bank of America (BAC): He’s been steadily paring this down, selling off billions in shares over several months.
- Ulta Beauty (ULTA): In a rare "fast" move, he bought in Q2 of 2024 and was completely out by Q4.
- Full Exits: He also walked away from names like T-Mobile, Paramount, and HP.
The "Buffett Indicator" Is Screaming
Buffett has a favorite metric. It’s simple, kinda old-school, and it's currently flashing red. It’s the ratio of the total stock market capitalization to the U.S. GDP.
Historically, when this ratio is over 100%, stocks are considered expensive. Right now? It's sitting near 200%.
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When Warren Buffett sells S&P index funds, he’s basically saying he can't find anything worth buying at these levels. He famously said, "Price is what you pay, value is what you get." If the S&P 500 is trading at 26 times earnings, and the historical average is closer to 15 or 16, the Oracle is essentially saying the value just isn't there.
The Succession Factor
We can't talk about these sales without mentioning that a massive era just ended. Warren Buffett officially retired as CEO at the end of 2025, handing the keys to Greg Abel. While Buffett remains Chairman, the "selling spree" has been seen by some as a way to clean up the balance sheet for the next generation.
Abel is inheriting a "Fort Knox" of liquidity. This gives him what Buffett calls an "elephant gun"—the ability to buy a massive company the second a market crash happens.
But for the rest of us, it’s a bit nerve-wracking. If the greatest investor of all time is hoarding cash and selling the very index funds he told us to buy, should we be worried?
Should You Sell Your Index Funds Too?
Here is where it gets nuanced. Buffett is managing hundreds of billions. He has "liquidity gravity"—his portfolio is so big it's hard to move without breaking things. You, likely, do not have that problem.
Buffett’s advice for the average person hasn't actually changed. He still believes that for 99% of people, staying the course in an index fund is the best way to build wealth over 30 years. The reason he is selling is that his goal is different. He isn't trying to retire in 20 years; he's trying to find a way to deploy $380 billion in a way that beats the market.
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Honestly, he’s a value hunter. And right now, the forest is empty of bargains.
Actionable Insights for Your Portfolio
If you're watching these moves and feeling an itch to hit the "sell" button, take a breath. Here’s how to actually apply the "Buffett Sell-Off" logic to your own life:
- Check Your Valuations: If you have individual stocks that have soared and are now trading at crazy P/E ratios, it might be time to "trim" just like Buffett did with Apple. Taking profits isn't a sin.
- Build a Cash Buffer: You don't need $382 billion, but having some "dry powder" in a High-Yield Savings Account (HYSA) or a Money Market Fund is smart. If the market does correct—like it did in early 2025—you’ll want cash to buy the dip.
- Don't Abandon the Index: Unless you have the skill to pick undervalued companies and the patience to wait years for a payoff, the S&P 500 is still your best bet for long-term growth.
- Watch the Interest Rates: Buffett is happy in Treasuries because they pay well right now. If rates drop significantly, expect to see that cash pile start moving back into the market.
Buffett isn't "quitting" the stock market. He’s just waiting for it to go on sale. He’s been through the 1973 crash, the 1987 crash, the Dot-com bubble, and the 2008 Great Recession. Each time, he went in with a pile of cash and came out wealthier. By selling those S&P index funds, he's just making sure his "elephant gun" is fully loaded for the next big opportunity.
Stay patient. Keep your costs low. And maybe keep a little extra cash on the side, just in case the Oracle is right again.
Next Steps for Investors: Review your current asset allocation to ensure you aren't over-leveraged in high-growth tech stocks. Consider moving a portion of your portfolio into short-term Treasury bills or a high-yield cash account to mimic Buffett's "dry powder" strategy while waiting for better market valuations.