In the Q&A session at Berkshire Hathaway’s annual meeting, CEO Warren Buffett and vice chairman Charlie Munger repeatedly warned investors to lower their expectations. When a shareholder asked whether Buffett’s recent purchases of publicly traded stocks were likely to generate returns greater than 7% to 10% over time, Buffett promptly said no.

Buffet said that as an investor, you don’t need to predict the economic cycle (or even pay much attention to it). Instead, one should focus on evaluating individual businesses if you pick your own stocks — or, simply buy the entire market in the form of an index fund.

When a shareholder asked for the single best specific investment idea Buffett could recommend to an individual in his 30s, Buffett said: “I would just have it all in a very low-cost index fund from a reputable firm, maybe Vanguard. Unless I bought during a strong bull market, I would feel confident that I would outperform…and I could just go back and get on with my work.” That makes lot of sense, as an index funds usually out perform any other kind of investment.

Asked whether Berkshire will seek to purchase entire private companies based in China or India, Buffett responded: “We would like to. If we get lucky, we’ll buy one or two in the next three or four years. I don’t know if it will be in China, India, Germany, the U.K. or Japan — there’s a lot of luck in that in terms of families thinking of us specifically…. But you will see the day that BRK owns businesses in both countries [India and China].

Coming from Buffet that speaks volumes about the potential of Indian and Chinese economies in the coming years.  The Stock Markets in both India and China have undergone a substantial correction since the beginning of this year and right now seems a a good time for long term investors to put their money in.