Question

There are two benefits for why individual investors would choose mutual funds rather than individual stock purchases. The two benefits from the book are diversification and the expertise of mutual fund mangers. Look up Warren Buffet famous 10-year bet with a hedge fund manager in order to discuss how he would explain how we would choose mutual funds based on the benefits.

Answer 1

Warren Buffet challenged hedge in 2008 that the funds performance on exorbitant fees charged was not justified. Both

parties challenged for a million dollar bet.Finally Buffet won the bet.The challenge with hedge fund industry couldnt satisfy performance of funds.He said that smart investment on index funds is good thing to follow.Index funds have low turnover rates as they are inexpensive and through S&P 500 they can buy all big companies.Eliminating human error and risk funds eliminate trading with a positive approach.To put in a S&P 500 fund money is invested in best way.It is a type of mutual fund which allow investors who want to increase their wealth.The stocks index performance is simply tracked by this fund.For long term investors investing in small amounts for longer period is beneficial.For every investor the growth will progress slowly towards success.As these type of mutual funds are best he suggested S&P 500 index funds for every individual was valuable.