Barry Ritholtz, Columnist

Charles Ellis' Advice for Individual Investors

The low-cost approach.

January 23, 2017 at 4:23 PM UTC

Barry Ritholtz is a former Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

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This week on Masters in Business we speak with Charles D. Ellis, chairman of the Yale Endowment, a Vanguard Group Inc. director, founder of Greenwich Associates and all-around finance-industry legend. This is our second conversation with Ellis.

Despite working with big institutions his entire career, Ellis explained that the best approach for most individual investors is a simple asset allocation composed mainly of low-cost index funds. But he also said that the term "passive" understates what that approach entails.