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Berkshire Hathaway's Buffett advises most investors to prefer low-cost index funds over active management.

Market News
19 May 2026
24/7 Wall Street
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Neutral
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Despite Berkshire Hathaway's extraordinary 60-year track record of 19% annual growth, Warren Buffett consistently recommends that most investors choose low-cost index funds like the S&P 500. This advice is based on decades of data showing about 85% of active managers underperform the market due to fees and turnover. Berkshire remains a unique exception with strong holdings and steady returns, but Buffett's bet against hedge funds in favor of an index fund and his personal investment instructions highlight that for typical investors, simple index funds are the best long-term choice. The trend toward low-fee, transparent investing continues to grow, making index funds the preferred way to capture market gains over time.

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