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WARREN BUFFETT: I think it's the same thing that makes most sense practically all of the time, and that is to consistently buy an S&P 500 low-cost index fund. Keep buying it through thick and thin, and especially through thin. The temptation arises when you see bad headlines in the newspapers to say, 'Well, maybe I should skip a year' or something. Just keep buying it. American business is going to do fine over time, so you know the investment universe is going to do very well.

The Dow Jones Industrial Average went from 66 to 11,497 in one century, and then since that century has ended, it's more or less doubled again. American business is going to do well. The trick is not to pick the right company; most people aren't equipped to do that, and plenty of times I make mistakes on that myself. The trick is to essentially buy all the big companies through the S&P 500, to do it consistently, and to do it in a very, very low-cost way.

Costs really matter in investments. If returns are going to be seven or eight percent and you are paying one percent for fees, that makes an enormous difference in how much money you have at retirement.

At the annual meeting for Berkshire Hathaway this year, I introduced a special guest to the audience of 40,000 shareholders: Jack Bogle. I wanted to recognize him because I think Jack Bogle has done more for American investors than any other person connected with Wall Street or the investment process. Along with a number of other people, he came up with the idea of the index fund. He wasn't the sole thinker behind it, but he was the guy that implemented it and crusaded for it.

Now there are trillions of dollars in low-cost index funds. Those people are going to have better lives; they’re going to have better retirements, and their kids are going to inherit more money because of Jack Bogle and his efforts.