Warren Buffett Has Endorsed the Same Investment for Decades. History Backs Him Up.
Investing is one of the very few things where the rewards increase with less work.
Overview
Warren Buffett became one of the wealthiest people in the world by picking individual stocks and holding them for years. But he doesn't think retail investors should do the same. Instead, he's spent the past several decades advocating for a much simpler strategy. Buffett, the retired CEO of investing conglomerate Berkshire Hathaway, thinks most people should just buy an index fund tracking the S&P 500 (SNPINDEX: ^GSPC) and hold it indefinitely.
In 1993, Warren Buffett wrote that an investor without the sophistication to evaluate individual companies could outperform most investment professionals by simply investing in an index fund. More than two decades later, he made a 10-year bet with Protégé Partners co-founder Ted Seides that a low-cost Vanguard S&P 500 fund would outperform a group of hedge funds selected by an investment professional. The index fund won easily.
Details
Today, the Vanguard S&P 500 ETF (NYSEMKT: VOO) provides one of the easiest ways to follow Buffett's advice. But why would one of history's best stock pickers recommend that most people shouldn't try to pick stocks? The numbers provide a pretty convincing answer.
Source
Originally published at www.fool.com.