Low-Cost Index Fund
For the average investor, Warren Buffet advocates for index funds.
- Put 10 % of the cash in short-term government bonds.
- Put 90 % in a very low-cost S&P 500 index fund.
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Unbelievable how basic these are, but they made Buffet one of the richest man alive.
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Investing is Easier Than You Think
According to Warren Buffet, if you invest in a very low-cost index fund over time, you'll do better than 90% of people who start investing at the same time. To start, Buffet advises to put 10% of the cash in short-term government bonds, and 90% in a very low-cost S&P 500 index fund.
1. Pick an index
There are hundreds of different indexes you can track using index funds. The most popular index is the S&P 500 Index
Here's a short list of some additional top indexes, broken down by what part of the market they cover:
- Large U.S. stocks: S&P 500, Dow Jones Industrial Average, Na...
2. Choose the right fund for your index
Once you've chosen an index, you can generally find at least one index fund that tracks it. For popular indexes like the S&P 500, you might have a dozen or more choices all tracking the same index.
If you have more than one index fund option for your chosen index, you'll want to ask...
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