> Warren Buffett Blog: Invest like Warren Buffett by investing in Index funds

Wednesday, March 19, 2014

Invest like Warren Buffett by investing in Index funds

Warren Buffett wants trustees to invest his money in Index funds once he is 
'gone'.


From his annual Feb 2014 letter to shareholders:

"My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S & P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers."

"Both individuals and institutions will constantly be urged to be active by those who profit from giving advice or effecting transactions. The resulting frictional costs can be huge and, for investors in aggregate, devoid of benefit. So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm."