I don’t really agree with Warren here. There are alot of hedge-funds who are run by very smart people who outperform the market. That being said, there are far more who underperform the market. When people ask me for advice on what to do, I usually tell them to open an account at www.vanguard.com and invest in the S&P 500 index, which has a very low expense ratio (the fees you pay for the brokerage to buy all 500 companies for you).
There is a mutual fund and ETF that tracks the index. This is a quick back of the napkin calculation: If you are going to put in $60,000 or more for more than a year, buy the ETF. Otherwise, buy the mutual fund.
S&P 500 Index Mutual Fund (VFINX): https://personal.vanguard.com/us/funds/snapshot?FundId=0040&FundIntExt=INT#tab=3
S&P 500 Index ETF (VOO): https://personal.vanguard.com/us/funds/snapshot?FundId=0968&FundIntExt=INT
Mr. Buffett unloaded what he called a “sermon” about hedge funds and investment consultants on Saturday, saying they are usually a “huge minus” for anyone who follows their advice.
Read Full Story: Warren Buffett’s Epic Rant Against Wall Street – MoneyBeat – WSJ