The results of Buffett’s bet are in, and guess who’s doing the happy dance?

In a widely publicized bet with hedge fund manager Ted Seides, Warren Buffett wagered $1 million in 2008 that Vanguard’s S&P 500 Index Fund would deliver better returns over a ten-year period than hedge funds handpicked by Seides. The proceeds would go to charity, and Girls Inc.—an organization that supports young girls in Omaha through after-school and summer programs—would be the recipient if Buffett won.

Those girls are doing the happy dance, thanks to Buffett and the S&P 500 Index.

Final results over the course of the bet were a 7.1% annualized gain for the S&P 500 index fund versus just 2.2% per year for the hand-picked basket of hedge funds. To put that in perspective, $100,000 invested in the index fund would have grown to nearly $200,000, but just $124,000 in the collection of hedge funds.

Buffett accurately predicted his win, as we discussed here. A vocal critic of hedge funds, Buffett argued that high fees—typically 2% of assets plus 20% of the gains—ultimately doom hedge funds to underperform the market averages.

Like Buffett, we have been index fund enthusiasts for years. Index funds are an effective tool for building a well-diversified portfolio. And despite Wall Street’s claims, it is extremely rare for an actively managed fund or hedge fund to outperform its respective index benchmark.

Amazingly, Seides said he’d do the bet again, demonstrating in this writer’s view an abundance of arrogance and real lack of awareness of how markets work.

But then again, resisting the temptation to invest in (or promote!) what might possibly do well, and to instead stick with what is most plausible, isn’t always popular or easy. Buffett would surely agree.