After taking risk into account, do more managers than you’d see by chance outperform with persistence? Virtually every economist who studied this question answers with a resounding ‘no’. Mike Jensen in the sixties and Mark Carhart in the nineties both conducted exhaustive studies of professional investors. They each conclude that in general a manager’s fee, and not skill, plays the biggest role in performance.”

– Eugene Fama, Jr.

But experience conclusively shows that index-fund buyers are likely to obtain results exceeding those of the typical fund manager, whose large advisory fees and substantial portfolio turnover tend to reduce investment yields. It enables you to obtain a very broad diversification with only a small investment.

– Warren Buffett