How Buffett’s 90/10 Rule Can Simplify Your Investment Strategy
Key Takeaways
- Warren Buffett’s 90/10 strategy involves allocating 90% of assets to a low-cost S&P 500 index fund and 10% to short-term government bonds.
- The 90/10 rule offers simplicity, lower fees, and the potential for higher returns.
- The strategy is based on historical returns for the S&P 500, as well as Buffett’s skepticism about the performance of the average fund manager.
- Critics say such a high allocation to equities isn’t suitable for all investors, particularly those nearing retirement or already retired.
The 90/10 rule comes from legendary Warren Buffett’s advice for average investors. Put 90% of your money into a low-cost S&P 500 index fund and the other 10% in short-term government bonds.
The idea is simple: most people…
