Warren Buffett, a long-time believer that individual investors would best be served by buying and holding index funds in their portfolios, is putting his money where his mouth is.

Mr. Buffett has agreed to a bet with the founders of Protégé Partners, LLC. If in ten years the S&P 500 Index has outperformed a portfolio of hedge funds, chosen by the Protégé Partners, net of fees, costs and expenses, Protégé Partners will have to donate $1,000,000 to Girls Incorporated of Omaha. If Mr. Buffett loses the bet he will donate $1,000,000 to Friends of Absolute Return for Kids. The bet is being administered by The Long Now Foundation, a public education nonprofit foundation, based in California. For more details on the bet, please click here.

Who do you think will win this bet?

I personally would never bet against Mr. Buffett’s common sense or track record, or the S&P 500 index’s long-term performance.

Mr. Buffett’s most recent letter to Berkshire Hathaway shareholders is available here. Mr. Buffett provides his views about indexing on page 19.