Warren Buffett’s Investment Advice

Warren Buffett’s investment advice is simple.

Warren Buffett’s Berkshire Hathaway is out with its annual letter to shareholders.  And he said that the ‘elite’ have wasted $100 billion ignoring Buffett’s investment advice.

“Over the years, I’ve often been asked for investment advice.  In the process of answering I’ve learned a good deal about human behavior.” Buffett recounted this in the letter.

“My regular recommendation has been a low-cost S&P 500 index fund,” he said. “To their credit, my friends who possess only modest means have usually followed my suggestion.”

However, not everyone listens to Buffett’s advice. “I believe, however, that none of the mega-rich individuals, institutions or pension funds has followed that same advice when I’ve given it to them,” he said.

As a result, “much financial damage befell pension funds for public employees. In particular, many of these funds are woefully underfunded, in part because they have suffered a double whammy: poor investment performance accompanied by huge fees.  The resulting shortfalls in their assets will for decades have to be made up by local taxpayers.”

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