Warren Buffett On Diversification

Reader “sumflows” uploaded this video from Warren Buffett’s speech at Florida that discussed Buffett’s advice on diversification, and the best part about it is that Buffett gives advice based on the particular goals that leads each person to investing in the first place.

http://www.youtube.com/watch?v=wbjPiYE-F4Y&feature=youtu.be

If you are someone that is making $9,000 per month post-tax and is only spending $6,500 of it, and you don’t have a particular desire to spend a lot of time studying individual companies, then it makes a lot of sense to open up an account with Vanguard and funnel the money into the S&P 500 Index Fund each month that barely costs anything in fees (the expense ratio for “VFINX” is 0.17%, meaning you would have to pay $17 each year on every $10,000 you entrust to this S&P 500 Index Fund run by Vanguard).

The first of the two main advantages with this strategy … Read the rest of this article!