Why does Warren Buffet tend to recommend mutual funds for investing?

Hello!

I think that there are 2 reasons as to why he recommended such an investment. It is not very expensive and they are not tied to the success of one single entity

If you were to buy single stocks, it is likely to cost much more to manage, which means that advisors may take a large amount of your earnings. Investing in mutual funds would allow you to not pay as much for fees as compared to hiring an advisor.

According to Buffet, “The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently.”

I think that another reason for Buffet satying this would be that mutual funds, in this case index funds takes a passive approach that would likely eliminate almost all trading activities, making it rather safe.

He probably had recommended it to have it in an investment portfolio. After all its important to keep your portfolio diversified.

Not to mentioned, a mutual funds itself is also diversified in a sense as it is a pool of stocks or bonds. And there are also two types of mutual funds, managed or exchanged traded (ETFs)

ETFs has often been said to be a good investment to hedge against the market inflation as it grows with the market (which also means it is unlikely to beat the Market by a huge gap).

But always, please DYOR before any investment or seek professional advice.