Warren Buffett has always advised his followers to stick to low-cost, passive index funds, which can offer broad exposure to the stock market and cost a fraction of actively managed funds. “It’s so obvious and yet all the commercial push is telling you you ought to do something different today than you did yesterday,” he said. “You don’t have to do that. You just have to sit back and let American industry go to shop for you.” Buffett added: “No consultant in the world is going to tell you just buy an S&P index fund and sit for the next 50 years. You don’t get to be a consultant that way and you certainly don’t get an annual fee that way.” In fact, Warren Buffett made a million-dollar bet that by investing in a completely unmanaged, broad-market low-fee index fund, he could beat the gains earned by a high-powered hedge fund with a team of managers at the helm. (yahoo.com)
The Rise and Rise of Interest Rates.