Buffett's 90/10 portfolio

What is the best way to invest money now in Buffett’s recommended 90% S&P 500/10% short term treasuries portfolio if intending to hold for the long term? With treasury yields still low and the S&P still overpriced is the best approach to hold cash until treasury yields are higher and until the S&P appears to have finished its correction? Buffett’s 90/10 portfolio looks to me like a very prudent portfolio long term, but not right now.

What is the best way to invest money now in Buffett’s recommended 90% S&P 500/10% short term treasuries portfolio if intending to hold for the long term?

Do bear in mind that this specific allocation was the recommendation for his widow, not you.
She will be a multi-multi-multi-millionaire who will never have a financial worry in the world, and would probably have a hard time spending the dividends.
The price of the asset in question simply doesn’t matter for her. Not at purchase time, and not at any later time.
There is no need for a positive return.

If this doesn’t describe you very well, that notional portfolio might not have relevance for you.

As an aside, her dividend stream will be so large that I’ve never quite figured out why he has a T-bill leg in there at all.

Jim

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would probably have a hard time spending the dividends.

I know no women who has trouble spending money… but I am not Buffett either.

“Do bear in mind that this specific allocation was the recommendation for his widow, not you.”

Thanks. It’s actually a small, gift portfolio that I’ve set aside for a young person. Probably 100% S&P 500 would be better, but I’m still unsure as to whether to invest it now or leave it in cash until the market appears to have finished correcting. I expect to add money to the portfolio each year for the next few years.

“As an aside, her dividend stream will be so large that I’ve never quite figured out why he has a T-bill leg in there at all.”

I suspect Mr Buffett considers low probability extreme outcomes in his decision. For example, war time and the stock market is closed for 5 years and businesses have to suspend dividends. At least she would have a large cash pile😀

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I suspect Mr Buffett considers low probability extreme outcomes in his decision. For example, war time and the stock market is closed for 5 years and businesses have to suspend dividends. At least she would have a large cash pile

I suppose that makes sense.
At that scale, why not prepare for the extreme scenarios if there is no meaningful downside?
“Let me tell you about the very rich. They are different from you and me…”

Jim

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https://fm.cnbc.com/applications/cnbc.com/resources/editoria…

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 is mine.

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