Warren Buffett predicted 17 years ago that the S&P 500 index would make minimal returns, The New York Post reports.
In 1999, Buffett, chairman of Berkshire Hathaway and one of the richest men in the world, told Fortune that the S&P 500 would not perform as well in the next 17 years as it had in the previous 17 years, predicting that the index would only rise 6 percent by 2016.
"I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like they've performed in the past 17," he told Carol Loomis, Fortune reporter and longtime friend of Buffett's, as well as a Berkshire Hathaway shareholder.
For the next 17 years, Buffett sees investors who stick to a low-cost S&P index fund and reinvest the dividends will do much better than an investor who buys a 17-year government bond and reinvests in it. He also thinks "do-nothing" or amateur investors who follow that index fund tactic will generally find greater success than investors who rely on professionals at high prices.
"Many professionals who fail their investors by underperforming the index funds will get very rich in the process of doing so," he told Fortune.
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