Personal Investments • Opinions on 90/10 Portfolio by Warren Buffett

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I don't think it's particularly confusing. While I don't necessarily agree with the advice, the advice is very clear. 90% in the Vanguard S&P 500 fund and 10% in short term treasuries (not a bond fund). What more could he have said about it? I don't see how he could be more clear.

It's clear, but not complete.

Is the recommendation 90/10 for all investors, all ages, from the 20 something starting out to the 70 year old investor?

Is the recommendation 90/10 for investors, unlike his spouse, that can not afford to see the portfolio drop by 50%?

If you think of this recommendation as "you want a simple and easy to mange portfolio that will grow nicely through the years, try this" sure, it works.

It's not a recommendation for all investors or even any investors except one. Not sure why people think it applies to them. It doesn't. It applies to the trustee of his trust who will manage the money on behalf of his spouse. Now you can try to apply it to your life if you want, but that's not who he made the recommendation for.

Actually no. There was at least one other thread (this topic comes up what, two or three times a year?) a while back where I made the claim you made above, and another poster corrected me by pointing to a link with an interview with Buffett where he did, in fact, say more or less that 90/10 was a pretty good portfolio for about anybody.

Let's see ... I think this thread covers the interview in question:

viewtopic.php?t=376165

this is the relevant paragraph from the interview:

And I've been-- part of it goes outright, part of it goes to a trustee. But I've told the
trustee to put 90% of it in an S&P 500 index fund and 10% in short-term governments.
And the reason for the 10% in short-term governments is that if there's a terrible period
in the market and she's withdrawing 3% or 4% a year you take it out of that instead of
selling stocks at the wrong time. She'll do fine with that. And anybody will do fine with
that. It's low-cost, it's in a bunch of wonderful businesses and it takes care of itself.

Italics mine. I mean, that's not much detail, but it is an explicit statement that the portfolio has wider applicability than just his situation.

Statistics: Posted by TN_Boy — Wed Aug 07, 2024 2:44 pm — Replies 179 — Views 20956

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