Warren Buffett Always Bets On The S&P 500

Warren Buffett once made a bet and I think it’s the greatest thing he’s ever done for the stock market. More than ten years ago, he basically said something along the following lines to a group of investors called Protege Partners:

“I am going to show you something funny. I’ll buy an S&P 500 index fund and you invest your money into hedge funds. Let’s see who wins 10 years from now. Also, the winner of this bet gets $1 million.”

Here are the results, so far:

This simple bet conveys a pretty powerful message.

It shows how you don’t need to overthink the market or be intimidated by it. You may have seen the movie the Big Short or read about big market crashes, but if you have the patience and think America will go on forever, the tools available to you are there for the taking. They are cheap, easy to access, and offer diversification.

The S&P 500, the 500 biggest American companies, continues to outperform even the best hedge funds.

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