Posts Tagged ‘Index Funds’
When Mr. Buffett Speaks, You Listen
How privileged would you feel if you were attending the Berkshire Hathaway annual shareholder meeting? To be in the presence of the world’s most successful investor, the world’s richest man. Warren Buffett. Gasp. Tim Ferris of the blog Four Hour Work Week wrote great notes he took from the conference. I think one of my favorite answers from Mr. Buffet was:
“If you were 30 years old and had no dependents but a full-time job that precluded full-time investing, how would you invest your first million dollars, assuming that you can cover 18 months of expenses with other savings? Thank you in advance for being as specific as possible with asset classes and allocation percentage.”
Buffett let out a small laugh and began. “I’d put it all in a low-cost index fund that tracks the S&P 500 and get back to work…”
followed with…
“…Put it all in a low-cost index fund like a Vanguard 500.” M: “Professionals take croupier profits out of the system. No one will give you this advice [index funds] because no one gets paid for it.” M: “The whole secret of successful investing [full-timers] is non-diversification. If you know nothing —> diversity.” B: “There are situations, for the full-time investor, where it’d be a mistake not to invest 50% of your net worth in one business.” If more aggressive: small stocks and specialized bonds, but no currencies.
Now doesn’t this all sound familiar? Index funds = Boring but brings in the $$$. Read the rest of Tim Ferriss’s article - Picking Warren Buffett’s Brain: Notes froma Novice.
