Warren Buffett's classic advice to 99% of investors is still paying off

Warren Buffett famously says that virtually all investors should own a low-cost S&P 500 index fund.

The business icon's advice continues to pay off with the S&P 500 hitting a new high on Tuesday.

Buffett has said his approach avoids high fees and doesn't require investing smarts or hard work.

Warren Buffett says almost nobody can do what he does, so they shouldn't even try. His advice continues to pay off.

The legendary investor has proclaimed for decades that 99% of people shouldn't try to pick winning stocks, dabble in options, time the market, or hire a money manager.

"My regular recommendation has been a low-cost S&P 500 index fund," the retired Berkshire Hathaway chairman and CEO wrote in his 2017 letter to shareholders.

The benchmark index , which tracks the performance of 500 of the largest publicly traded companies in the US, climbed to a record 7,819 points on Tuesday.

It has gained 14% this year, almost 80% over the past five years, and nearly 1,100% since it slumped below 700 points during the financial crisis.

Buffett, 96 , has said that his go-to strategy avoids high fees that eat into investment returns, and owning a broad index avoids having to identify the best stocks, figure out when to buy or sell them, balance a portfolio, or place leveraged bets that could blow up disastrously.

Answering a question from author and lifestyle guru Tim Ferriss during Berkshire's annual shareholder meeting in 2008, Buffett said that his approach lets people invest their money then " forget it and go back to work ."

"You will not get that advice from anybody because nobody gets paid to give you that advice," Buffett said. "You will have all kinds of people telling you how much better they can do for you than that, and how if you just give them a wrap fee, or give them commissions, or whatever it may be, that they will do better — but they won't do better."

Buffett has said he's given similar advice to the trustee who will manage the wealth he leaves to his wife upon his death: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund."

"I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions, or individuals — who employ high-fee managers," he said.

Buffett's advice is rooted in his belief that the US will have a bright future.

"Over the long term, the stock market news will be good," Buffett wrote in his famous op-ed at the height of the financial crisis, titled "Buy American. I am."