Most Investors Won't Outperform this Simple Portfolio

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sixtyforty
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Most Investors Won't Outperform this Simple Portfolio

Post by sixtyforty » Thu Aug 18, 2016 8:27 am

Good article for Bogleheads. However, I do find it interesting that Buffet advocates 90% equities. The tests they ran I'm not sure tested the 90% portfolio.

http://news.morningstar.com/articlenet/ ... o&SR=Yahoo
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Van
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by Van » Thu Aug 18, 2016 8:37 am

Thanks for posting this article. It is for most Bogleheads preaching to the choir.

As for Buffet's choice of 90% equities, I guess in the long run it will do better than a lesser allocation to stocks. How long is the long run? I guess no one can be sure of that.

miles monroe
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by miles monroe » Thu Aug 18, 2016 8:49 am

the market could down 80% and mr. buffet isn't gonna miss any meals.

IlliniDave
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by IlliniDave » Thu Aug 18, 2016 8:55 am

A bit of a quibble, but the 90%/10% attributed to Buffet was instructions on how to set up a trust of presumably > $1B for his widow, not generic advice for all investors.
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livesoft
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by livesoft » Thu Aug 18, 2016 8:58 am

A version of this article was published on morningstar.com in March 2014.

It's the ol' 3-fund portfolio.

And a big quible: It's BuffeTT, not buffet. Yes, I no I speled quible wong.

Look for this article to re-appear in another 2 years.
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baw703916
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by baw703916 » Thu Aug 18, 2016 11:51 pm

Most investors won't outperform that portfolio because 90% equities is more risk than most investors can comfortably handle! :beer
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Dandy
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by Dandy » Sat Aug 20, 2016 8:33 am

Generally, you pick an investment allocation based on your ability and need to take risk. Most people would not be able to stay with a 90% allocation to equities. What Buffet recommended for his wife's investments really has no bearing on what you should do.

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zonto
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by zonto » Mon Aug 22, 2016 8:56 am

The article mentions the Buffett letter merely as an appeal to authority to support its overall conclusion that low-cost index portfolios outperform most active portfolios over time. The portfolio actually used in the study by Ferri and Benke was comprised of 40% U.S. stock index, 20% international stock index, and 40% U.S. aggregate bond index, which portfolio was compared to numerous portfolios of similar weighting using active funds.

Silence Dogood
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Re: Most Investors Won't Outperform this Simple Portfolio

Post by Silence Dogood » Mon Aug 22, 2016 9:07 am

The title of this article makes it sound like clickbait.

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