Buffett is best known for being one of the world’s most successful investors, and his company, Berkshire Hathaway, is said to be one of the best companies in the world.
Although Berkshire Hathaway is not officially a management investment company, it effectively plays in this space by selling and managing a portfolio of securities for its investors.
According to S&P Dow Jones Indices, during the 40 years (1978 – 2018) period, Berkshire Hathaway beat the S&P 500 by more than 10% in 23 years.
Although Berkshire Hathaway is very successful, Warren Buffett surprisingly doesn’t recommend his family invest in the company stock shares.
In one recent letter to Berkshire Hathaway shareholders, he directed the trustee for his wife’s benefit to put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.
In this video, he explains why he suggests his wife invest in S&P 500 rather than Berkshire Hathaway.
Warning: This video is to show you Buffett’s opinion about investing in index funds. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.