--- title: "Meaning & Key Takeaway of: Our standard prescription for the…" description: "\"Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying o..." image: "https://sms4smile.com/quotes/i/8e3/charlie-munger-458_becoming_our-standard-prescription-for-the-know-n_2323065.jpg" --- # Our standard prescription for the know-nothing investor… ![“Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index…” quote by Charlie Munger](https://sms4smile.com/quotes/i/8e3/charlie-munger-458_becoming_our-standard-prescription-for-the-know-n_2323065.jpg) [Download](https://sms4smile.com/quotes/i/8e3/charlie-munger-458_becoming_our-standard-prescription-for-the-know-n_2323065.jpg) [Open image](https://sms4smile.com/quotes/i/8e3/charlie-munger-458_becoming_our-standard-prescription-for-the-know-n_2323065.jpg) > “Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it's not the individual investors that are doing it. It's the institutions.” [Charlie Munger](https://sms4smile.com/quotes/author/charlie-munger/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Investing in low‑cost index funds avoids broker conflicts and yields better long‑term returns for ordinary investors. **In simple terms:** Index funds are cheap, simple, and effective. Key Takeaway Choose a no‑load index fund. Themes investing conflict of interest cost efficiency Mood pragmatic analytical Type advisory financial When to use this quote - retirement planning - college savings - wealth building - portfolio diversification Key Concepts efficient market hypothesis behavioral finance Questions to Reflect On - How do you assess risk versus cost? - What role should active management play in a diversified portfolio? A Different Perspective Index funds may underperform in niche markets or during extreme volatility. ★ ★ ★ ★ ★ No ratings yet [Brokers](https://sms4smile.com/quotes/about/brokers/) [Customer](https://sms4smile.com/quotes/about/customer/) [Horizon](https://sms4smile.com/quotes/about/horizon/) [Index funds](https://sms4smile.com/quotes/about/index-funds/) [Individual](https://sms4smile.com/quotes/about/individual/) [Institutions](https://sms4smile.com/quotes/about/institutions/) [Investing](https://sms4smile.com/quotes/about/investing/) [Investors](https://sms4smile.com/quotes/about/investors/) [Long term](https://sms4smile.com/quotes/about/long-term/) [People](https://sms4smile.com/quotes/about/people/) [Stock broker](https://sms4smile.com/quotes/about/stock-broker/) [Thinking](https://sms4smile.com/quotes/about/thinking/) [Time](https://sms4smile.com/quotes/about/time/) ## Related quotes > [Most investors, both institutional and individual, will find that the best way to own common stocks (shares') is through an index fund that charges…](https://sms4smile.com/quotes/warren-buffett/most-investors-both-institutional-and-individual-will-find-that-the/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [Nothing highlights better the continuing gap between rhetoric and substance in British financial services than the failure of providers here to emulate Jack Bogle's…](https://sms4smile.com/quotes/jonathan-davis/nothing-highlights-better-the-continuing-gap-between-rhetoric-and/) [Jonathan Davis](https://sms4smile.com/quotes/author/jonathan-davis/) > [... the best way to own common stocks is through an index fund.](https://sms4smile.com/quotes/warren-buffett/the-best-way-to-own-common-stocks-is-through-an-index-fund/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [Most investors would be better off in an index fund.](https://sms4smile.com/quotes/peter-lynch/most-investors-would-be-better-off-in-an-index-fund/) [Peter Lynch](https://sms4smile.com/quotes/author/peter-lynch/) > [A minuscule 4 percent of funds produce market-beating after-tax results with a scant 0.6 percent (annual) margin of gain. The 96 percent of funds…](https://sms4smile.com/quotes/david-f-swensen/a-minuscule-4-percent-of-funds-produce-market-beating-after-tax/) [David F. Swensen](https://sms4smile.com/quotes/author/david-f-swensen/) > [Assuming that the future is like the past, you can outperform 80 percent of your fellow investors over the next several decades by investing…](https://sms4smile.com/quotes/mark-hulbert/assuming-that-the-future-is-like-the-past-you-can-outperform-80/) Mark Hulbert > [The simple index fund solution has been adopted as a cornerstone of investment strategy for many of the nation's pension plans operated by our…](https://sms4smile.com/quotes/david-f-swensen/the-simple-index-fund-solution-has-been-adopted-as-a-cornerstone-of/) [David F. Swensen](https://sms4smile.com/quotes/author/david-f-swensen/) > [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…](https://sms4smile.com/quotes/burton-malkiel/experience-conclusively-shows-that-index-fund-buyers-are-likely-to/) [Burton Malkiel](https://sms4smile.com/quotes/author/burton-malkiel/) > [Still, I figure we shouldn't' discourage fans of actively managed funds. 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My mentor, Ben Graham, took this position many…](https://sms4smile.com/quotes/warren-buffett/a-low-cost-index-fund-is-the-most-sensible-equity-investment-for-the/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [By periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals.](https://sms4smile.com/quotes/warren-buffett/by-periodically-investing-in-an-index-fund-the-know-nothing-investors/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [The key aspect of an index fund is that many of them, not all of them, but many of them are extremely cheap.](https://sms4smile.com/quotes/william-j-bernstein/the-key-aspect-of-an-index-fund-is-that-many-of-them-not-all-of-them/) [William J. Bernstein](https://sms4smile.com/quotes/author/william-j-bernstein/) > [An index fund is a fund that simply invests in all of the stocks in a market. 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