Warren Buffett made a bet, that came to be known as Buffett’s bet, that the S&P 500 would outperform any basket of hedge funds in the next 10 years. It started on the 1st day of January 2008, and was supposed to conclude at the end of 2017.
If you look the final results, the S&P annualized gain was 7.1%, which is impressive considering that this challenge started during a terrible time in the market. The group of hedge funds didn’t even earn an average of 2.1% during that period of time.
It’s weird that Buffett made this bet, because he has made his fortune by buying individual stocks. This bet was contrary to the way he invests personally.
Letter to shareholders In the event of his death, he directs the trustees to put 90% of the trust funds value in S&P 500 index funds.
It does raise the important question, in your own portfolios, should you just stay to with a packaged product?
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