News.Life

Warren Buffett's 90/10 Portfolio: Will This Strategy Hold Up in 2025?

Unknown investing, investment portfolios, investment strategies and advice, investors, warren buffett

<img data-document-id="cms/api/amp/image/AA1ANagF" data-reference="image" src="https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1ANagF.jpg"/>

 Warren Buffett
 He ranks among the most successful investors in history, which is why everyone pays attention whenever he shares insights about his investment approach. Throughout his 60-year tenure at the helm of Berkshire Hathaway, Buffett has built his wealth by pinpointing underpriced companies and acquiring them.


 Shareholders of Berkshire Hathaway have seen tremendous gains under Buffett’s leadership, with the company's stock providing an annual return of 19.9% since 1965, as opposed to 10.4% for the S&P 500.
 S&P 500
 .


 It might have been unexpected when Buffett disclosed that his spouse's inheritance would be placed into a trust, with 90 percent of those funds allocated this way.
 S&P 500 index fund
 and the rest allocated to short-term government bonds.


 If you're attempting to determine which asset allocations best suit your needs, it could be beneficial to
 consult with a financial planner
 . DIWIDA’s
 financial advisor matching tool
 Can assist you in locating an advisor nearby.


 Here’s how Buffett commented on the 90/10 approach and if this tactic holds up in today’s world.

<h2>
 Warren Buffett’s 90/10 portfolio
</h2>

 In his 2013 letter to
 Berkshire shareholders
 Buffett promoted the advantages of holding stocks over an extended period and demonstrated that even individuals with minimal knowledge of investing can attain acceptable outcomes. To illustrate this, he shared his guidelines for managing his wife’s estate after his passing.


 My advice for the trustee can’t get simpler: Allocate 10% of the capital into short-term government bonds and the remaining 90% into a highly affordable S&P 500 index fund, such as one offered by Vanguard," Buffett stated. "I am confident that the trust’s long-term performance under this strategy will outshine those achieved by many investors—be they pension funds, institutions, or individuals—who opt for high-fee managers.


 After the release of the letter, Buffett expanded on his recommendations during an interview with CNBC.


 I outlined what I believe the typical individual without expertise in stocks should do. My widow won't have such knowledge," Buffett stated. "I aim to ensure she achieves a reasonable outcome. It’s clear she won’t attain extraordinary returns.


 The rationale behind the 10% allocation to short-term government securities is that during tough times in the financial markets, when she needs to withdraw around 3% or 4% annually, those funds can be sourced from this portion rather than liquidating equities at an unfavorable moment," explained Buffett. "This approach ensures her success and guarantees positive outcomes for anyone following it. This strategy involves minimal costs and invests in numerous excellent companies, thereby requiring little intervention.

<div class="editorial-insight-box">
 
 
 Need an advisor?
 
 
 
 Looking for professional advice on handling your investments or preparing for retirement?
 
 
 DIWIDA’s AdvisorMatch
 I can connect you with a Certified Financial Planner™ who will assist you in achieving your financial objectives.
 
</div>
<h2>
 Does the 90/10 investment approach hold water?
</h2>

 Buffett’s 90/10 investment strategy holds considerable allure, yet it may not be suitable for all investors. Given that Buffett’s wife will probably receive far more wealth than necessary for her livelihood—since nearly all his Berkshire shares are designated for charitable purposes—the situation becomes quite different.
 stock market volatility
 is not expected to affect her lifestyle.


 However, not all investors feel at ease with volatility, according to Ryan Linenger, a Chicago-based partner at Plante Moran Financial Advisors.


 It can be extremely challenging for numerous investors to tolerate the level of fluctuation in a portfolio composed of 90% equities," Linenger stated. "Being invested in a portfolio you cannot remain committed to during market downturns can have negative consequences—often leading to unwise decisions which may significantly diminish the returns an investor ought to earn over the long term.


 Linenger suggested that allocating a significant part of the "growth segment" of a long-term investment portfolio to an S&P 500 index fund could be sensible. However, he believes that investors might gain additional advantages through more extensive diversification.


 Linenger stated that a 90/10 portfolio "would leave out most of the publicly traded firms both within the U.S. and internationally, as well as various sectors of the bond market — thereby shrinking the potential investment options without justification."

<h2>
 90/10 asset allocation: Pros and cons
</h2>
<h3>
 Advantages
</h3>
<ul>
 <li>
 
 Simplicity:
 
 The 90/10 strategy is straightforward to implement and simplifies the process of portfolio rebalancing.
 </li>
 <li>
 
 Low-cost:
 
 Index funds
 Tracks of the S&P 500 are highly affordable, usually charging around $3 for each $10,000 invested, and there are also options available with zero expense ratio.
 </li>
 <li>
 
 Stock market growth:
 
 With 90 percent of your investment portfolio allocated to an S&P 500 index fund, you will reap the rewards of its strong long-term returns.
 stocks
 , maintaining an approximate annual rate of 10 percent over extended durations.
 </li>
 <li>
 
 Diversification:
 
 By opting for a widely diversified index fund, investors avoid the risks associated with attempting to select particular winning or losing stocks.
 </li>
</ul>
<h3>
 Disadvantages
</h3>
<ul>
 <li>
 
 High allocation to stocks:
 
 The primary drawback of a 90/10 investment portfolio is that most of your funds are susceptible to the fluctuations of stock markets.
 </li>
 <li>
 
 Risk for retirees:
 
 Certain retired individuals might feel uneasy about having a significant portion of their investments in stocks. They could prefer a less risky investment portfolio with a greater emphasis on bonds or cash equivalents.
 fixed income investments
 might suit some people better.
 </li>
 <li>
 
 Not suitable for investors with a low risk tolerance.
 
 
 risk tolerance
 
 
 :
 
 Certain investors can't cope with fluctuations in the stock market and might make unwise choices precisely when prices have dropped.
 </li>
</ul>
<h2>
 Bottom line
</h2>

 Buffett’s 90/10 strategy offers a straightforward and inexpensive method for managing a portfolio capable of handling significant ups and downs. However, those who are particularly sensitive to swings in the stock market might want to opt for owning less equity and spreading out investments widely. This approach helps them adhere to their investment plans and ultimately reach their financial goals.
 long-term financial goals
 You might additionally consider
 seek advice from a financial consultant
 for further guidance.


 Editorial Disclaimer: It is recommended that all investors perform their own thorough research into investment strategies prior to making an investment choice. Additionally, it should be noted that previous performance of investment products does not ensure future growth in value.

Warren Buffett's 90/10 Portfolio: Will This Strategy Hold Up in 2025?

Unknown investing, investment portfolios, investment strategies and advice, investors, warren buffett

Warren Buffett He ranks among the most successful investors in history, which is why everyone pays attention whenever he shares insights about his investment approach. Throughout his 60-year tenure…

6 Powerful Warren Buffett Quotes Every retiree Should Know

Unknown investors, personal finance retirement, retirement planning, stock market investment advice, warren buffett

<img data-document-id="cms/api/amp/image/AA1A5Nq1" data-reference="image" src="https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1A5Nq1.jpg"/>

 Investors who have spent any significant time in the market likely know at least a couple of Warren Buffett’s key stock-picking strategies. It would be prudent to follow his guidance. After all, he has proven track record.
 
 Berkshire Hathaway
 
 regularly outperforms the benchmark
 
 S&P 500
 
 If you adopt his method, you might end up doing the same thing.


 However, what about retirees? Even though the extremely wealthy Buffett can manage with an investment horizon of "forever,” many average individuals cannot. Retirees eventually require drawing upon their investments' worth as a source of livelihood. Moreover, when one ceases receiving earnings from employment, their financial focus transitions from seeking growth to generating income. Has the Sage of Omaha shared any insights suitable for this group?


 
 
 Where should you put your $1,000 investment at this moment?
 
 Our analysis group has just disclosed their thoughts on what they consider to be the
 
 10 best stocks
 
 to buy right now.
 
 
 Learn More »
 
 
 


 In reality, certain Buffett strategies are applicable for retirees.

<h3>
 1. "Purchase only those items which you would still feel content holding even if the market closed for ten years."
</h3>

 He has expressed this concept somewhat differently by stating, “If you wouldn’t consider holding onto a stock for 10 years, then you shouldn’t contemplate keeping it for just 10 minutes,” yet the core principle remains unchanged. Essentially, this criterion serves as an acid test to determine if you genuinely have faith in the long-term prospects of the company associated with the stock.


 Investors frequently jump into speculative stocks with the understanding that if circumstances deteriorate, they have the option to exit their positions. When this potential escape route lurks in the back of an investor’s thoughts, it likely isn’t a choice suitable for most retirees to make initially.

<h3>
 2. "My approach to investing involves putting money into enterprises that are exceptionally good, even a novice could manage them successfully. Eventually, someone incompetent might end up at the helm."
</h3>

 This statement stands on its own and is applicable across various types of organizations and their stocks—whether they focus on growth, value, dividends, or others. The question here is whether an entity can maintain its performance regardless of leadership changes, or if your investment relies solely on specific individuals.

<h3>
 3. "The cost you incur is the price; the benefit you receive is the value."
</h3>

 This particular advice can impact anyone, regardless of whether you've retired or still have many working years ahead. The point being made here is that purchasing inexpensive stocks solely due to their low prices is usually unwise. Businesses with high quality are typically valued higher and come with a pricier share cost that you ought to be prepared to cover. Warren Buffett further clarifies this concept by stating, “It’s much smarter to acquire an excellent business for a reasonable sum rather than a mediocre firm for a great deal.”

<h3>
 4. "Be cautious of an investment strategy that receives widespread praise; typically, significant opportunities often evoke little interest."
</h3>

 Here’s another guideline that compels investors across different age groups to candidly assess their motivations. Are your investments aimed at reaching particular financial objectives, or are they more about deriving enjoyment? A significant number of individuals fall into the latter category, possibly even trying to convince themselves otherwise.


 Indeed, although achieving the level of income you desire—and require—is thrilling, your investment portfolio thrives best when it’s dull, with its administration aiming for zero drama. Engaging in dramatic activities often leads to making impulsive errors driven by emotion.

<h3>
 5. "People nowadays who keep cash equivalents feel secure. This confidence is misplaced. They've chosen an extremely poor long-term investment, which offers almost no returns and is guaranteed to lose value over time."
</h3>

 The general idea Buffett seems to be addressing is aimed at individuals who seek growth through investments while holding down a regular job. This concept also holds true for retirees depending on their investment portfolios for income. Essentially, keeping large amounts of money in a savings account with minimal interest rates erodes your purchasing power over time.


 By taking initiative to shift this cash towards investments — be it stocks or perhaps high-interest money market funds at present — you can achieve a notably better return with minimal sacrifice of real liquidity. Many online banks and brokerage accounts currently offer such options.
 around 4%
 Regarding cash-equivalent and nearly liquid deposit accounts, just to provide some context.

<h3>
 Being smarter isn’t necessary; being more disciplined is what sets us apart from others.
</h3>

 In conclusion, theOracle of Omaha provides some optimismby pointing outthat successin investingis within reach for everyone,since effectivestock selectiondoes notdepend on formaltraining,education,experience,oraccess to additionalresourcesand information.The key factor isthe abilityto adhere steadfastlytoa strategygrounded instrueedinvestingprinciples.


 Buffett emphasizes this point by stating, “A fool with a strategy can outperform a genius who lacks one.” Naturally, having a strategy offers a structure for maintaining discipline. In the absence of such a plan, even those who have retired might be tempted to pursue the latest attractive opportunity instead of staying committed to their carefully crafted investment portfolio aimed at meeting particular goals.

<h2>
 The $
 
 22,924
 
 The Social Security benefit many seniors entirely miss noticing.
</h2>

 If you’re similar to many Americans, you might be lagging several years—or even more—behind on saving for retirement. However, some lesser-known “ Social Security tips” may assist in increasing your retirement earnings. For instance: one simple strategy could earn you an additional $
 
 22,924
 
 More every year! After mastering strategies to optimize your Social Security benefits, we believe you can retire with confidence and achieve the peace of mind everyone seeks.
 Just click here to find out how you can learn more about these techniques.


 
 Check out the "Social Security secrets" »
 


 
 James Brumley
 has no holdings in any of the aforementioned stocks. However, The Motley Fool holds positions in and recommends shares of Berkshire Hathaway. Additionally, The Motley Fool has a
 disclosure policy
 .

6 Powerful Warren Buffett Quotes Every retiree Should Know

Unknown investors, personal finance retirement, retirement planning, stock market investment advice, warren buffett

Investors who have spent any significant time in the market likely know at least a couple of Warren Buffett’s key stock-picking strategies. It would be prudent to follow his guidance. After all, he …

Warren Buffett Reveals the 'Cardinal Sin' Charlie Munger Taught Him to Avoid—and How It Made Him a Better Leader

Unknown berkshire hathaway, business, investing, money, warren buffett

<img data-document-id="cms/api/amp/image/AA1o5GUo" data-reference="image" src="https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1o5GUo.jpg"/>

 Berkshire Hathaway CEO
 
 Warren Buffett
 
 isn't afraid to admit when he, or his company, has messed up.


 Mistakes are inevitable — and once you realize you've made one, you should own it quickly to prevent additional damage, Buffett wrote in his
 annual letter to shareholders
 , published this past weekend. He learned that lesson from his longtime business partner and friend,
 the late Charlie Munger
 , he noted.


 "The cardinal sin is delaying the correction of mistakes or what Charlie Munger called 'thumb-sucking,'" wrote Buffett. "Problems, he would tell me, cannot be wished away. They require action, however uncomfortable that may be."


 Buffett used the words "mistake" and "error" 16 times in his annual letters from 2019 through 2023, he noted in this year's communication. Those missteps ranged from incorrectly assessing job candidates and economic trends to investing in the wrong companies.


 
 DON'T MISS:
 
 
 How to start a side hustle to earn extra money
 


 Most of his errors at Berkshire Hathaway stemmed from reluctance, Buffett said at the company's
 <img data-document-id="cms/api/amp/video/AA1zUKVe" data-reference="video"/>
 : He'd missed opportunities to invest in exciting new companies because they'd asked for too much money.


 "The cost of that [has been] many, many billions," said Buffett. And given the company's
 cautious investing strategies
 , "I'll probably keep making that mistake."


 Munger made his stance on mistake-making clear at a
 Wesco Financial Corporation meeting in 2016
 : You shouldn't dwell on past errors, but you should reflect on them to avoid repeating them.


 "Nobody bats a thousand," Munger said. "I think it's important to review your past stupidities so you are less likely to repeat them, but I'm not gnashing my teeth over it or suffering or enduring it."

<h4>
 'Mistakes fade away; winners can forever blossom'
</h4>

 Fessing up to an error can build trust among colleagues, because
 it shows emotional intelligence and humility
 , communication expert Matt Abrahams told Make It last year. It can make your peers feel more comfortable admitting when they need help too, prompting more teamwork and collaboration.


 Early into his career at Amazon, now-CEO Andy Jassy presented a 220-slide PowerPoint on his team's operating plan to founder Jeff Bezos and other company executives,
 Jassy said in a video
 uploaded by Amazon earlier this year. Midway through the presentation, Bezos pointed out that one slide was riddled with mistakes.


 Jassy opted for demonstrating humility instead of becoming defensive; he offered an apology, admitted his mistake, and proceeded without fixation. “Should you wish to gain trust: When you claim you have something, ensure you provide it. Should you possess something that isn’t progressing well, critique yourself constructively and make corrections,” Jassy stated in the video.


 The positive aspect for Buffett is that, according to his analysis in this year's letter, the impact of his right calls during his time at Berkshire Hathaway appears to outweigh the effect of his incorrect choices.


 "As we have observed, a solitary successful choice can yield an astonishing impact over time," he noted, pointing out Berkshire Hathaway’s acquisition of the major insurer Geico, the recruitment of insurance executive Ajit Jain as vice president, along with “the fortunate circumstance of encountering Charlie Munger—a uniquely invaluable collaborator, confidant, and loyal companion.”


 "Mistakes fade away; winners can forever blossom," Buffett added.


 
 Want to earn some extra money on the side?
 
 Take 's new online course
 How to Start a Side Hustle
 to learn tips to get started and strategies for success from top side hustle experts. Sign up today and use coupon code EARLYBIRD for an introductory discount of 30% off $97 (+taxes and fees) through April 1, 2025.


 Plus,
 sign up for Make It's newsletter
 to get tips and tricks for success at work, with money and in life.

<img data-document-id="cms/api/amp/video/AA1y7JRt" data-reference="video"/>

Warren Buffett Reveals the 'Cardinal Sin' Charlie Munger Taught Him to Avoid—and How It Made Him a Better Leader

Unknown berkshire hathaway, business, investing, money, warren buffett

Berkshire Hathaway CEO Warren Buffett isn't afraid to admit when he, or his company, has messed up. Mistakes are inevitable — and once you realize you've made one, you should own it quickly …

4 Powerhouse Lessons from Berkshire's Best Buffett and Munger Stories

Unknown berkshire hathaway, business, investing, money, warren buffett

<img data-document-id="cms/api/amp/image/AA1aPFbU" data-reference="image" src="https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1aPFbU.jpg"/>

 On Friday evening, as I was on the floor of the
 yearly gathering of Berkshire Hathaway stockholders
 I encountered my seatmate from the flight between Washington, D.C., and Omaha—a charming lady who was manning the Geico booth.


 "She informed me that Bill Murray was around," she said. I assured her I would stay vigilant.


 Certainly, for the myriad of shareholders who annually descend upon Nebraska, Murray, or any other celebrity, takes a back seat to the true highlight of the event.
 Warren Buffett
 and in previous years, he did this
 right-hand man Charlie Munger
 who passed away in 2023.


 In this region, the top brass at Berkshire share one significant trait with Murray; nearly everybody who has crossed paths with them appears to have a tale to tell.


 On Friday earlier, I went to
 VALUEx BRK
 One of numerous investor events held around Omaha resembling unofficial Berkshire Hathaway conferences. Organized by Guy Spier, who manages the Aquamarine Fund based in Zurich, this gathering included presentations from various advocates of value investing. Participants ranged from investment professionals to scholars to writers, including Doerthe Obert, Charlie Munger’s long-time aide.


 Nearly everybody who has crossed paths with one of the renowned figures from Berkshire has gained some insight into the wisdom they share. Here’s what you can glean from their tales.

<h4>
 Choose the right partner
</h4>

 Monsoon Pabrai, the managing partner and portfolio manager at Drew Investment Research, remembered a lunch during which she and her sister—both young girls at the time—sat on either side of Buffett. Throughout the three-and-a-half-hour discussion, she paid close attention, though she often reflects back on just one particular piece of guidance he offered.


 "The one that has always stayed with me was when he looked at both me and my sister directly into our eyes, simply because we are females or young girls, and stated, 'The
 The most crucial choice you make is deciding whom to wed.
 She mentioned, 'This applies to both individuals in a marriage. Picking your lifelong companion is incredibly crucial.'


 indeed, this was also stated by Buffett during the shareholders' meeting on Saturday.


 When asked for advice that everybody should hear, Buffett advised the shareholders to consider how they want their obituaries to be written and to live their lives according to this vision. “Surely, in my time, one of the key aspects was choosing a partner who would support you in achieving these goals,” he stated.

<h4>
 Inspire yourself... and hold yourself responsible.
</h4>

 In "The Great Minds of Investing," William Green discussed his experiences with photographer Michael O'Brien as they profiled and captured images of Munger.


 Meeting up with his buddy Chris Davis, who happens to be a member of the Berkshire board, brought back some valuable counsel from Munger—surround yourself with reminders of those you admire.


 Early on, Charlie advised him to display pictures of admired individuals in his workspace, as these are people he wouldn’t want to let down.


 Green pointed out that Munger notably possessed a statue of his idol, Benjamin Franklin. In return, Green himself owns a statue of Munger.


 "I believe that arranging your physical space to include images of admired individuals is an excellent strategy. It increases the likelihood of you acting admirably," Green stated.

<h4>
 Make time for yourself
</h4>

 Gillian Segal, who wrote "Getting There: A Book of Mentors," discussed her determination in securing an interview with Buffett. Despite initial difficulties reaching him via phone, she managed to catch up with him at a charitable function, persuading him to spare a few moments for conversation.


 Once it was time to set up their meeting, Segal found himself surprised.


 “After getting through [Buffett’s assistant], she informed me about all the open slots, and it went something like, ‘Alright, this week he’s free on Monday,’ with a large chunk of time set aside. Then came Tuesday, also a big window, followed by some specific availability on Wednesday. For Thursday, another substantial period,” she explains. “It dawned on me then that his success stems from how meticulously he protects his schedule. He ensures he has enough time for crucial tasks without being overwhelmed by commitments.”


 It’s likely that fewer people are vying for your time compared to Warren Buffett, or perhaps you don’t have an assistant skilled at managing those requests. However, this serves as a valuable lesson for everyone: Success in your profession requires dedicating uninterrupted time to focus on it fully.

<h4>
 Stay in your lane
</h4>

 Munger’s long-time aide Dörthe Obert shared an abundance of delightful, intimate tales about Munger, covering everything from his dedication to his job to his struggles with maintaining a proper diet.


 Her memories of her professional collaboration with Munger offer valuable insights for those managing staff members. She mentioned, “Our working rapport was excellent, and he placed complete trust in me,” adding, “Whatever the task might be, you’ll take care of it and accomplish it.”


 Having faith in his assistant to handle her tasks allowed Munger to focus on his own responsibilities.


 When it came to their working relationship, Munger was content to stick to his role as well.


 When I inquired about what her boss had shared with her regarding investments, Obert hesitated.


 She mentioned to me that he didn’t discuss investments with anyone at all.


 Not even once? Even in passing?


 “No, because even if he offered some guidance and it didn’t pan out,” she explained. “He wouldn’t mind losing a bit of money. However, if I were to suffer significant losses, he wasn’t willing to bear that burden.”


 
 This story has been revised to include the accurate spelling of William Green.
 


 
 
 Looking to earn additional income beyond your regular employment?
 
 Sign up for
 
 
 'new online course titled "Generating Passive Income Online"
 
 
 To discover popular methods for generating passive income, advice on beginning your journey, and true accounts of successes achieved.
 


 
 Plus,
 
 
 subscribe to Make It's mailing list
 
 
 To acquire advice and strategies for achieving success at your job, managing finances, and navigating everyday life.
 

<img data-document-id="cms/api/amp/video/AA1nEzhB" data-reference="video"/>

4 Powerhouse Lessons from Berkshire's Best Buffett and Munger Stories

Unknown berkshire hathaway, business, investing, money, warren buffett

On Friday evening, as I was on the floor of the yearly gathering of Berkshire Hathaway stockholders I encountered my seatmate from the flight between Washington, D.C., and Omaha—a charming lady wh…