No. of Recommendations: 5
Mr Buffett's advice for his wife is to hold mainly the S&P 500. She will be very rich, so the dividends alone will definitely be enough whether it's wildly overvalued or not.True, though Buffett did say the 90% S&P500, 10% cash portfolio would be fine for anyone.
CNBC 3/3/2014:
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.For our year 2000 retiree, withdrawing 4% from a 90% SPY, 10% cash portfolio would have been gut wrenching. They have about 5.5 years worth of withdrawals remaining, and might just make it 30 years. Valuations matter!
90% Berkshire would have been very fine, they have 10x the SPY investor.
60% SPY 40% VBMFX would have been OK, they got 13 years worth remaining.
https://www.portfoliovisualizer.com/backtest-portf...
