Anyone even remotely involved in the financial markets knew an era had come to an end when legendary investor Warren Buffett, age 94, said he'll retire from Berkshire Hathaway at the end of the year.

The announcement wasn't entirely unexpected, considering he had been CEO of the company for six decades. The news ignited an outpouring of appreciation.

For one thing, his investment record is mind-boggling. As economist Noah Smith noted, if you invested $1,000 in the S&P 500 in the mid-1960s, you'd have several million dollars by now. Invest in Buffett's stock-picking acumen by owning shares in Berkshire Hathaway, and you'd have more than a billion dollars.

Put somewhat differently, from 1965 to the end of last year, Buffett had achieved an annualized average return of 19.9% vs. 10.4% for the S&P 500.

For another, legions of people, including me, delighted in reading his witty and informative letters to shareholders. He offered readers a mix of insights into his investment philosophy, practical suggestions for savers and pithy summations of his approach to life.

One consistent piece of investment advice stands out, and it was directed at workers who needed to invest their money in 401(k)s and similar retirement savings plans, but had families to raise. They don't have the time, the skill or the obsessiveness to deeply research companies to uncover the few diamonds among the many zircons. How could they realistically do well in the markets?

His answer: Invest in broad-based, low-fee index funds for the equity portion of the portfolio. He emphasized low fees were critical to long-term investment performance and consistently criticized the financial community for charging customers high fees for underperforming the market. The fees charged on index funds are razor thin compared to their actively managed competitors.

"By periodically investing in an index fund," he wrote, "the know-nothing investor can actually out-perform most investment professionals."

A fun way to learn more about the index fund revolution is to watch a recent documentary on YouTube by award-winning director Errol Morris. In "Tune Out the Noise," he interviews academics behind the rise in modern finance theory, many associated with the University of Chicago.

The individual stories are fascinating. So is watching academics tap into the newfound power of computers and data to understand markets better. Their insights transformed our understanding of the financial markets and led to innovations like index funds.

Chris Farrell is senior economics contributor for "Marketplace" and a commentator for Minnesota Public Radio.