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Buffett thoughts on index funds

Just pick a broad index like the S&P 500. Don’t put your money in all at once; do it over a period of time. I recommend John Bogle’s books — any investor in funds should read them. They have all you need to know.”

Charlie Munger: One could imagine a period like Japan 13 years ago, however, in which indexing over time wouldn’t work.

[When asked whether one should buy Berkshire, invest in an index fund, or hire a broker, Buffett replied:]

We never recommend buying or selling Berkshire. Among the various propositions offered to you, if you invested in a very low cost index fund – where you don’t put the money in at one time, but average in over 10 years –you’ll do better than 90% of people who start investing at the same time.

Charlie Munger: It’s hard to sit here at this annual meeting, surrounded by smart, honorable stock brokers who do well for their clients, and criticize them. But stock brokers, in toto, will do so poorly that the index fund will do better.

Source: Berkshire Hathaway Annual Meeting
Time: 2002, 2004

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