Comments on: Index Funds Advice from Warren Buffett http://amateurassetallocator.com/2010/07/27/index-funds-advice-from-warren-buffett/ Amateur Asset Allocator Tue, 22 May 2012 02:58:13 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Andy http://amateurassetallocator.com/2010/07/27/index-funds-advice-from-warren-buffett/comment-page-1/#comment-13288 Andy Mon, 17 Jan 2011 21:15:36 +0000 http://amateurassetallocator.com/?p=5562#comment-13288 Warren Buffett has access to economies of scale that the vast majority will never have. He is able to purchase entire businesses outright, often at handsomely discounted rates. This is how he has been able to consistently beat the market average, in spite of the ever-increasing cash pile he is sitting on that will always need periodically re-allocating. Your average Joe, not knowing anything about investing or the nature of stocks is probably way better off heeding Buffett's advice. Cash is a lousy long-term asset, especially with interest rates and inflation being what they currently are. Index funds, require no knowledge or skill, only the wherewithal to buy a fixed sum each month for the long term. Merely doing this will trounce the majority of so-called actively managed funds. Warren Buffett has access to economies of scale that the vast majority will never have. He is able to purchase entire businesses outright, often at handsomely discounted rates. This is how he has been able to consistently beat the market average, in spite of the ever-increasing cash pile he is sitting on that will always need periodically re-allocating.

Your average Joe, not knowing anything about investing or the nature of stocks is probably way better off heeding Buffett’s advice. Cash is a lousy long-term asset, especially with interest rates and inflation being what they currently are. Index funds, require no knowledge or skill, only the wherewithal to buy a fixed sum each month for the long term. Merely doing this will trounce the majority of so-called actively managed funds.

]]> By: Jim http://amateurassetallocator.com/2010/07/27/index-funds-advice-from-warren-buffett/comment-page-1/#comment-10989 Jim Tue, 12 Oct 2010 22:35:31 +0000 http://amateurassetallocator.com/?p=5562#comment-10989 Develope a simple strategy. Set it and forget it. Develope a simple strategy. Set it and forget it.

]]> By: DIY Investor http://amateurassetallocator.com/2010/07/27/index-funds-advice-from-warren-buffett/comment-page-1/#comment-9916 DIY Investor Wed, 28 Jul 2010 17:53:30 +0000 http://amateurassetallocator.com/?p=5562#comment-9916 One big reason that Warren Buffett recommends index funds is that he understands the extent to which investors are ripped off in actively managed mutual funds by hidden fees and costs. Over a long period of time investors line the pockets of those who claim they can time the market, pick stocks, use strategies based on technical analysis etc. He is exactly right when he says that most investors would be much better off in low cost, low turnover, indexed funds. One big reason that Warren Buffett recommends index funds is that he understands the extent to which investors are ripped off in actively managed mutual funds by hidden fees and costs. Over a long period of time investors line the pockets of those who claim they can time the market, pick stocks, use strategies based on technical analysis etc. He is exactly right when he says that most investors would be much better off in low cost, low turnover, indexed funds.

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