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Buffett’s Advice: Buy The Index


A client sent me the link to a New York Times article about Warren Buffett titled The Oracle of Omaha, Lately Looking a Bit Ordinary.  The piece discusses Buffett’s impressive long-term track record of adding “alpha”, which is the ability to beat an index without adding risk to a portfolio.  However, the underlying theme of the article is that the chances the rest of us have for beating “the market” is slim to none.  Perhaps that’s why Buffett has instructed his estate to invest the trust created for his wife upon his death to index funds!  He goes on to say that he believes the long-term results from this policy will be superior to firms that employ high-fee managers.

We couldn’t agree more.  That’s why we choose to add value to our clients’ lives in so many more ways than through an investment return.  As long as our clients’ results from investing in index funds hover around “the market”, we can stay focused on helping our clients live their best lives!

“Success in investing doesn’t correlate with I.Q. once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperment to control the urges that get other people into trouble in investing.”  Warren Buffett 1998 



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