Berkshire Hathaway CEO (NYSE: BRK.A) (NYSE: BRK.B) Warren Buffett has a well-earned reputation as one of the world's best business pickers. From 1965 to 2022, Buffett's business acumen helped Berkshire's shares deliver an astounding compound annual return of 19.8%.

If you bought a fund tracking the benchmark S 500 and reinvested the dividends over this period, you'd still only end up with an average compound annual return of 9.9%. That's a testament to Buffett's uncanny skill as an investor.

Nonetheless, the Oracle of Omaha himself has often said that most investors should simply buy a low-cost index fund that tracks the S 500 and call it a day. In Berkshire's 2013 annual letter, for instance, he specifically recommended the Vanguard 500 Index Fund (NYSEMKT: VOO) for its low fees and nearly identical performance to its benchmark index.

Continue reading

Source Fool.com