Warren Buffett is one of the financial industry’s most successful and respected investors. So when he speaks, investors listen. Except when they don’t.
In his Berkshire Hathaway annual letter to shareholders earlier this year, Buffett talked about the power of index fund investing, and why wealthier investors tend to ignore it.*
“My regular recommendation has been a low-cost S&P 500 index fund,” he said. “To their credit, my friends who possess only modest means have usually followed my suggestion.”
“I believe, however, that none of the mega-rich individuals, institutions, or pension funds has followed that same advice when I’ve given it to them.”
“Wealthy individuals, pension funds, endowments and the like will continue to feel they deserve something ‘extra’ in investment advice. Those advisors who cleverly play to this expectation will get very rich. This year the magic potion may be hedge funds, next year something else.”
“My calculation, admittedly very rough, is that the search by the elite for superior investment advice has caused it, in aggregate, to waste more than $100 billion over the past decade. Figure it out: Even a 1% fee on a few trillion dollars adds up.”
If you choose to take Warren Buffett’s advice and use index funds as your primary investment vehicle, Zacks Advantage is a great way to do it. We manage wealth exclusively with ETF’s and index funds with the benefit of low fees, experienced, active management and much, much more. Learn more about the Zacks Advantage here!
Learn more about how Zacks Advantage combines the simplicity and low fees of a robo advisor with performance-focused active management. Download our Overview Guide today!
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss
Zacks Advantage is a service offered by Zacks Investment Management, a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. All material in presented on this page is for informational purposes only and no recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. Nothing herein constitutes investment, legal, accounting or tax advice. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Zacks Investment Management, Inc. is not engaged in rendering legal, tax, accounting or other professional services. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney- client relationship. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel.