Billionaire investor Warren Buffett is legendary for his stock picks, but he says most investors shouldn’t be picking individual stocks. Instead, investors will be better off buying low-cost index funds, a strategy Buffett has championed for years.
Index funds are passive investments that allow people to invest in a broad cross-section of the market with little effort and low fees. One popular type of index fund is an exchange traded fund (ETF). ETFs are designed to track and replicate the performance of a market benchmark or index, such as the S&P 500, which mimics the performance of the 500 largest US companies. So with just one ETF, you can effectively invest into all the companies or securities within that index.
As part of his remarks during the most recent Berkshire Hathaway annual shareholders meeting, Buffett said, “In my view, for most people, the best thing to do is to