Warren Buffett's classic advice to 99% of investors is still paying off

Warren Buffett's classic investing advice - to own low-cost S&P 500 index funds instead of trying to pick winning stocks or hire money managers - remains highly successful. The S&P 500 index fund, which tracks the performance of 500 major US companies, recently hit a record high of 7,819 points.

Buffett has maintained for decades that 99% of investors shouldn't attempt to outperform the market. Instead, his guidance emphasizes the simplicity and cost-effectiveness of investing in a broad market index. This strategy allows investors to "forget" about their investments and focus on other pursuits, as it avoids high fees and the need for market timing or stock selection skills.

Speaking during Berkshire Hathaway's annual shareholder meeting in 2008, Buffett emphasized the avoidance of high fees and the ease of owning an index fund. He contrasted this approach with the dubious claims of other investment advisors who promise superior returns for hefty fees.

In his 2017 letter to shareholders, Buffett recommended a simple allocation of 10% of wealth in short-term government bonds and 90% in a low-cost S&P 500 index fund for his wife's trust. He believed this policy would yield superior long-term results compared to most investors who rely on high-fee managers.

Buffett's faith in the US economy and the long-term prospects of the stock market has been unwavering. Despite acknowledging the challenges faced by the US in the 20th century, including wars, depressions, recessions, and other crises, he argued that the Dow Jones Industrial Average rose from 66 to 11,497 during that period.