Warren Buffet Says Money Spent On Plumbers Better Than In Hedge Funds.

When Warren Buffet says something on investment you must pay attention. Buffet  86, and billionaire investor recently said at the annual meeting of his Berkshire Hathaway Inc. argued that people would be better off sticking their money in an index fund than paying the high fees charged by hedge funds managers.

He said that in aggregate, investment professionals aren’t worth their fees. According to him, if you go to a dentist, or hire a plumber, there is added value by the professionals as a group compared to doing it yourself or just randomly picking laymen. In his opinion, in the investment world it is not true.

The active group, the people that are professionals in aggregate, are not can not, do better than the aggregate of people who just sit tight. Buffet has also challenged the 2-and 20 compensation model for hedge fund managers.

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