A few years ago he bet that a low cost index fund of stocks would outperform a group of professional managers, giving due consideration to both the investments and the fee charges.
Let's review the current situation as revealed in Buffett Has Big Lead in Stock Bet vs. Experts:
With four years remaining, Warren Buffett has a commanding lead in a decade-long bet that put a low-fee stock index fund up against a portfolio of high-priced hedge funds.
Buffett put his money behind his long-held argument that "experts" don't do better than the stock market as a whole. It's the basis of his argument that the fees "helpers" charge investors usually aren't justified.
In a Fortune piece, long-time Buffett friend Carol Loomis writes that after six years the fund Buffett selected for the wager, the Vanguard 500 Index Fund Admiral Shares, was up 43.8 percent at the end of 2013.
The other side of the bet is a collection of five hedge funds of funds chosen by New York-based Protégé Partners.
After all fees, their average gain was about 12.5 percent. The names of the funds have not been revealed."
Summing Up
The best way to make money is not to spend it.
And the best way to invest over the long run is to own a diversified basket of blue chip stocks.
And for most people, that's an S&P Index Fund or something similar.
That's perhaps boring, but it's profitable.
And that's all I have to say about that (Forrest Gump).
Thanks. Bob.
Reminds me of when the Wall Street Journal used to pit a group of "experts" and their stock picks up against someone just throwing darts at the stock board...the "darts" usually won.
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