Warren Buffett has talked quite a bit about mutual funds throughout his financial career. Buffett recommends mutual funds as one of the best ways to invest and also as one of the best ways to get a good return on your initial investments, especially as those investments compound over time.
Moreover, Buffett states that the only advice he will give to other people is the exact tactics and investment strategies that made his company, Berkshire Hathaway, and himself, both very successful. His advice to the average trustee investor is very simple and that is to put 10% of your money into short-term government bonds and the other 90% into low-cost S&P 500 index funds. These investments will also help you avoid the outrageous fees that many institutions or individuals will charge for their management skills. These low-cost index funds will outperform almost all managed portfolios in the long run.
Buffett states that it’s also worth keeping in mind that index funds will go up and down in the short-term, just like the stock markets. However, in the long-term, they tend to outperform most other managed portfolios. Considering most people save for retirement over a 30+ year period, these investments are wiser as they are able to gain value over time. This low-cost way of investing for retirement is not anything extraordinary, but it’s a solid plan to ensure that you have the funds you need to retire comfortably one day.
Buffett is a living example that these low-cost investments work as he has amassed an incredible net worth of more than $60 billion just by following his own investment advice. Some of the funds that Buffett sites as being your best options for long-term investing include the Vanguard Value Index Fund Investor Shares and the Fidelity Spartan 500 Index Investor Sales.