Warren Buffett said 'nobody gets paid' to give this easy investing advice — how it’s still helping your portfolio today
Warren Buffett has long argued that most investors are better off not trying to pick the next big winner in the stock market. Instead, he favors a low-cost fund that tracks the S&P 500, along with the patience to hold it through the market’s ups and downs.
It’s advice that may surprise people who know Buffett for his bets on individual companies like Apple and Coca-Cola. But he has often said that what works for him isn’t necessarily what most investors should do.
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He made the case again in a 2008 conversation about index funds with author Tim Ferriss, pointing to the financial industry’s reluctance to recommend an approach that doesn’t generate much in fees.
“You will not get that advice from anybody because nobody gets paid to give you that advice,” Buffett said at the time.
There’s more money in selling investors products that promise to beat the market than in recommending a fund designed to follow it. For anyone who doesn’t want to spend evenings poring over company earnings and weighing which stocks to buy, owning a slice of the broader market can be a more practical option.
Why Buffett thinks investors should keep it simple
An S&P 500 fund lets investors buy into hundreds of major U.S. companies in one shot, rather than trying to figure out which individual stocks should have a place in their portfolio. The appeal is less about excitement than avoiding the time and expense of trying to outperform the market on your own or hiring a financial advisor to do it for you.
That effort doesn’t always pay off, though — even for professionals. Fund managers may charge for their expertise, but that doesn’t mean they’ll make you more money than a more cost-effective index fund. Buffett has previously argued that most investors would be better off taking what the market gives them rather than paying a fund manager to try to beat it.
He put that argument to the test in 2008 when he wagered $1 million that an S&P 500 index fund would beat a group of hedge funds over the following decade. By the time the bet ended in 2017, the index fund had come out well ahead after fees.
That might seem at odds with the way Buffett made his fortune. Through Berkshire Hathaway, he has spent decades researching companies and making sizable, carefully considered investments. But he didn’t suggest that everyone else needed to do the same. For people without his experience, time, or resources, a simpler approach may make more sense.
Is the S&P 500 still a good bet?
Anyone who has held an S&P 500 index fund over the past few years has seen some impressive returns, with Business Insider reporting that the index was up about 14% in 2026 and nearly 80% over five years as of October.
It’s been a good run for investors, assuming they followed Warren Buffett’s advice to buy a low-cost index fund and hold onto it, although those gains aren’t something investors can assume will continue.
The S&P 500 includes hundreds of companies, but its 10 largest holdings now account for roughly 40% of the index, according to Business Insider. A lot of that comes down to big tech stocks, which have climbed on the excitement around AI. If that momentum fades, the S&P 500 could feel the effects, too.
Someone saving for retirement 20 years from now has time to recover from a market downturn — while someone hoping to buy a home next summer or retire very soon may not have that luxury if the market drops substantially just when they need the money. Even a broad-market index fund can lose value, and there’s no guarantee the market will recover before an investor needs to sell.
Buffett’s advice is to buy the market and give it time, rather than spend years trying to pick the stocks that will outperform. That’s been a rewarding approach lately, but investors still have to be comfortable holding on when the market heads the other way.
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This article originally appeared on Moneywise.com under the title: Warren Buffett said ‘nobody gets paid’ to give this easy investing advice — how it’s still helping your portfolio today
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