At Berkshire Hathaway Annual Meeting, Warren Buffett offered the biggest investment tip: Be wary of fees. Nobel Prize winner William Sharpe had elegantly explained the relentless rules of humble arithmetic to show that active investors in aggregate earn less than passive investors due to higher fees. For many years Buffett has been making the same argument and he urged investors to use low-cost funds to achieve their financial goals. The message is very simple: Investors would be better off ditching expensive money managers and consultants. “Supposedly sophisticated people, generally richer people, hire consultants. And no consultant in the world is going to tell you, ‘Just buy an S&P index fund and sit for the next 50 years,’” Buffett said. “You don’t get to be a consultant that way, and you certainly don’t get an annual fee that way.” We all can learn from Buffett’s biggest investment tip by watching out for fees and choosing low-cost index funds. (bloomberg.com)
Here’s Part 2 of the interview I did with, over on