Index funds are a great invention

Even if markets might go crazy, it’s still very difficult to outperform them. Back in 1991, index funds made up a short percentage of overall fund assets. Things have changed a lot since then. As one might believe that Buffett would have been the biggest detractor of index funds, he’s not.

He has praised multiple times index funds as one of the best ways for the wide majority of investors to gain a little bit of exposure to the stock market. He even singled out Bogle for special praise, particularly for launching the index revolution! Buffett even showed that intellectually, you can easily embrace both active and passive investing.

What it means to win the birth lottery

The last lesson can also apply to life in general, and not only to the little amount of time we spend investing. Buffett emphasized many times just how lucky he was to be born right where he was, and WHEN he was.

As he mentioned, if it was for another time and place, his talent for company assessment would have been probably useless. He has famously called this the birth lottery, so it’s a great reminder of all the luck that unfolded in our lives. And yes, if you’re reading this, you’ve probably been extremely lucky so far.

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