No. of Recommendations: 2
<<It's definitely not an argument for a portfolio that's 90% S&P 500 and 10% short term treasuries unless the time frame is more like 25 years instead of 7 years.>>
I have always considered that advice to be fully suitable only for those that are so wealthy (like Mr Buffett's widow) that rate of return is of no real concern.I saved the quote from Mr. Buffett from an interview where he was asked about it:
CNBC: PDF document3/3/2014
BUFFETT: Well, I didn't lay out my whole will. There's hope for some of you who haven't been mentioned yet.
The-- but I did explain, because I laid out what I thought the average person who is not an expert on stocks should do.
And my widow will not be an expert on stocks. And- I wanna be sure she gets a decent result. She isn't gonna get a sensational result, you know? And since all my Berkshire shares are going-- to philanthropy-- the question becomes what does she do with the cash that's left to her? 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.Bolding mine. "anybody will do fine with that"...but...I'm not so sure :-)
Definitely on-brand for him: "Never bet against America".
Not much in it between S&P500 and Berkshire since that time:
stockcharts.com: PerfCharts | StockCharts.com
