Dead Simple…
Warren Buffett has spent more than six decades making stock picking look look like a walk in the park.
But when it comes to what happens after he’s gone, the Oracle of Omaha has left behind a very different playbook.
→ No hunt for the next Coca-Cola.
→ No Berkshire-style treasure hunting.
In fact, his instructions are so simple they almost sound strange coming from Buffett.
And buried inside them is perhaps his most revealing investing lesson yet.
Here’s the story.⇩
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Very Un-Buffetty…
Buffett laid out the plan in his 2013 letter to Berkshire Hathaway shareholders:
✱ 90% → Low-cost S&P 500 index fund › Broad exposure to America’s largest companies.
✱ 10% → Short-term U.S. government bonds › A smaller cushion of stability and liquidity.
And that’s basically it.
Buffett wrote: “Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”
→ No Berkshire stock.
→ No handpicked portfolio of wonderful businesses.
→ No instructions for analyzing balance sheets, hunting for undervalued companies or trying to find the next great investment.
Which is what makes the advice so interesting.
The man who spent his career making investing look extraordinarily sophisticated left his family a portfolio that takes about five minutes to understand.
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So, Why Not Pick Stocks↓
Buffett has never been shy about the difficulty of doing what made him famous.
At Berkshire’s 2021 annual meeting, he put it plainly: “I do not think the average person can pick stocks.”
Buffett had the time, temperament, and skill to study businesses at a level most investors never will. An index fund skips that entire exercise. You don’t need to find tomorrow’s winners — you own a piece of the market and let the winners eventually reveal themselves.
There’s an important distinction here. Buffett isn’t saying stock picking can’t work. His career makes that argument pretty difficult.
He’s saying most people probably shouldn’t expect to replicate it.
You don’t need to invest like Buffett to follow Buffett’s advice.
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How’s That Advice Holding Up?
→ Pretty well.
Here’s the S&P 500, recent track record:
And those gains didn’t come with smooth sailing.
Markets had plenty to digest, including the war in Iran and its ripple effects across oil, inflation, and Treasury yields. Yet the S&P 500 still delivered a strong year.
That gets to the heart of Buffett’s advice: You don’t need to predict every storm to make it through one.
Own the market, stay invested, and let time do more of the work.
The Buffett Fine Print ⚠️
There’s one important catch: Buffett designed the 90/10 portfolio for his wife, not for everyone.
The money would arrive as a large inheritance, with a long investing horizon and very different needs from someone saving a little from every paycheck, approaching retirement, or relying on their portfolio for income.
So the lesson isn’t necessarily “put 90% of your money in the S&P 500.”
It’s the thinking behind it: keep costs low, diversify broadly, and don’t make investing more complicated than it needs to be.
The 90/10 split is Buffett’s prescription for one portfolio. The simplicity behind it is the part anyone can borrow.
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