After May 2007, Berkshire Hathaway annual shareholders meeting, Buffett told CNBC television interview that for most small investors, they did not have time to study the fundamentals of the listed and publicly traded companies, the low cost of the ETF was the best choice for investment in the stock market. The benefits are, although you may not buy at the lowest point, but also not at the highest point.
In the 2008 Berkshire shareholders meeting, one investor asked, “I am 30 years old, single, one income, and I want to save one million dollars. How will I invest?”
Buffett laughed and replied, “I will invest all of the money in a low-cost ETF that tracks the S & P 500 index, continue to work, and continue to put more money in the low-cost ETF.”
The biggest advantage of the ETFs is that they allow investors to buy the “market” and not only aan individual company stock. For example, buying an S & P 500 ETF means an equal participation in the US market momentum.
Because it is to buy the “market”, as long as the market trends upward in the long term, one will eventually make money. However, buying individual stocks is not the same thing! Investing in individual stocks inherits higher risks. Sudden changes in a company’s profitability will cause an unexpected plunge in the share prices and incur huge losses.
Investment is easy. No time to research? Look to invest in EFTs or mutual funds that track the broader market such as the S & P 500 index.