Southbourne Group Singapore, Tokyo Japan The Latest from Warren Buffet on Low-Cost Funds

Southbourne Group Singapore, Tokyo Japan on the Latest
from Warren Buffet on Low-Cost Funds Investing
Warren Buffett recently gave his best investment advice, and criticized the 'elite' for having thrown away $100
billion by snubbing it. Berkshire Hathaway came out with Buffet’s yearly letter to shareholders, covering an
assortment of topics, speaking on everything from stock buyouts to his favorite book last year and dishing our
expert investment advice.
"For many years, people have often sought investment advice from me; and in providing such advice, I’ve
learned to comprehend human behavior more and more," Buffett’s letter said.
Buffet further said, "My constant advice has been a low-cost S&P 500 index fund. Fortunately for my friends of
modest means, they have often heeded my recommendation."
In the annual letter, Buffet refers to Jack Bogle, who revolutionized investing through the introduction of the
index fund, as a "hero”.
But not all people listen to Buffett's advice. "However, none of the super-rich individuals, pension funds and
institutions has taken that same advice I gave to them," he said.
Buffet further said: "These investors, nevertheless, routinely thank me for my advice and then leave to follow
the advice of a high-commission manager or, for a lot of institutions, to look for another class of high-priced
adviser called a consultant.
"That professional, however, carries a problem. Imagine an investment consultant recommending to his clients
every single year to continue adding to an index fund replicating the S&P 500. That is committing career
suicide. But those hyper-helpers charge high fees, while they suggest small managerial shifts each year or so.
That recommendation is usually served in mysterious language illustrating why trendy investment “fads” or
present economic patterns justify the shifts.
"The rich have learned the habit for wanting the best cuisine, education, recreation, residences, sports ticket,
plastic surgery, anything you can think of. They somehow feel their money should afford them something
better than what the masses get.
"In certain instances, wealth can indeed bring the best services or products. As such, the financial “elites” – rich
people, pension funds, college endowments and others – have difficulty signing up humbly along with people of
modest means for a financial product or service. This hesitation of the wealthy ordinarily applies although the
product concerned is – based on expectations – the obvious choice. In my crude estimation, the search by the
wealthy for better investment advice has caused it, all in all, to squander over $100 billion in the last ten years.
That is: A one percent fee alone on a few trillion dollars can accumulate. Certainly, not all investor who