happyuk
8th January 2018, 18:59
A positive story in light of previous financial scandals.
Warren Buffett has sent a message to the average Joe investor proving that when it comes to investing sometimes the best way to make money in the stock market is to ignore the "experts" and invest passively over time in a low-cost index fund.
In 2007 he claimed that a cheap, computer-run index fund would deliver better returns over a decade than a portfolio overseen by a team of experienced hedge fund managers who could back any asset or investment strategy on earth – no matter how esoteric.
In other words, no financial wizardry, complex algorithms, searching for the next Microsoft/Intel/Google, buy/sell madness or high fees - just a boring computer-automated portfolio that blindly piggy-backs the S&P 500 or the FTSE 100 or whatever index for a small annual charge.
This decade-long period has now officially ended and it wasn’t anywhere near a close finish. According to calculations by The Wall Street Journal, the cheap tracker fund has returned an annual 7.1% compared with the hedge fund’s 2.2%. And this was in spite of the unforseen financial crash of 2008.
https://www.forbes.com/sites/johnwasik/2018/01/08/how-buffett-won-his-1-million-bet/#465a8daa2a6c
As Buffett once famously said:
"When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients,"
Warren Buffett has sent a message to the average Joe investor proving that when it comes to investing sometimes the best way to make money in the stock market is to ignore the "experts" and invest passively over time in a low-cost index fund.
In 2007 he claimed that a cheap, computer-run index fund would deliver better returns over a decade than a portfolio overseen by a team of experienced hedge fund managers who could back any asset or investment strategy on earth – no matter how esoteric.
In other words, no financial wizardry, complex algorithms, searching for the next Microsoft/Intel/Google, buy/sell madness or high fees - just a boring computer-automated portfolio that blindly piggy-backs the S&P 500 or the FTSE 100 or whatever index for a small annual charge.
This decade-long period has now officially ended and it wasn’t anywhere near a close finish. According to calculations by The Wall Street Journal, the cheap tracker fund has returned an annual 7.1% compared with the hedge fund’s 2.2%. And this was in spite of the unforseen financial crash of 2008.
https://www.forbes.com/sites/johnwasik/2018/01/08/how-buffett-won-his-1-million-bet/#465a8daa2a6c
As Buffett once famously said:
"When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients,"