Speaking at his company’s annual shareholder meeting, Berkshire Hathaway Chairman Warren Buffet said he far prefers index funds to exchange-traded funds because the latter encourages investors to trade frequently, Dow Jones reports.

“The best way, in my view, is to just buy a low-cost index fund and keep buying it regularly over time, because you’ll be buying into a wonderful industry, which, in effect, is all of American industry,” Buffet said.

“If you buy it over time, you won’t buy at the bottom, but you won’t buy it all at the top, either,” he added.

Buffet’s sentiments echo those of Vanguard founder Jack Bogle, who also is against frequent trading.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.