Warren Buffett says he can't beat the S&P 500 index.

The 'Oracle of Omaha' has spoken, as he does every year in his letter to shareholders.

Warren Buffett is the richest investor in the world. He runs Berkshire Hathaway, the world's most famous investment company and the fifth largest company in the S&P 500 (index of the largest US companies).

He told CNBC that he's had a "tough time" trying to beat the S&P 500 index of late.

According to CNBC, Buffett joked that most of the time even he doesn't know how to pick individual stocks and he thinks that the index is still the best way to invest in the stock market for most people.

At 84, Warren Buffett is looked up to as the guru of value investing by all types of investment advisers, whether of an active or passive persuasion.

A quick refresher on the difference between active and passive investing:

We agree with Warren, that passive management is a better option.

We go one step further than passive management. We adopt a whole of market approach like passive management but without the rule of having to buy and sell exactly in line with the index. We believe in passive management but with 'smart trading'. We take advantage of trading opportunities and will recreate the index without having to buy or sell any particular company. We call it 'structured' investing. Structured around the index with the same amount of diversification but without the constraint of having to buy or sell every time the index changes.

If you'd like to check out Warren being interviewed, he is delightful and his interviewer is hilariously dopy, see it here.

At one point in the interview Buffett says,

"I know for sure that the US economy is going to do very well over the long term, and I don't care what it does over the short term, so I'm always a happy guy."

I especially like the comment Buffett makes at the end of the interview when asked whether there are cracks appearing in the US economy. Buffett replies,

"I don't know what the US economy is going to do in the short term, neither do any of our economists at Berkshire Hathaway."

This surely is an indictment on anyone who thinks they can forecast companies, economies or markets over the short term. In fact, it is an indictment on active management. Such pure honesty from Buffett is a rarity in the money world which is full of braggadocio.

Keep asking great questions ...