Buffett's 90/10 portfolio may be too aggressive for some investors
Investment expert Ryan Dykmans says Warren Buffett's 90% stocks, 10% bonds split suits young savers but risks retirement or panic-prone investors.
Warren Buffett recommends the 90/10 split for investors who lack time to pick individual stocks. Buffett aims to maximise long-term gains with low-cost index funds.
Ryan Dykmans, an investment advisor, says it depends on the person. Younger investors with decades ahead and steady temperament can handle the 90/10 split.
Investors nearing retirement, drawing income from savings, or prone to panic-selling during crashes may find 90% in stocks too aggressive. Higher equity exposure sharpens the downswings.
Research shows people feel losses far more painfully than equivalent gains. Dykmans notes Buffett's advice remains sound: stay disciplined, buy with a margin of safety, and do not mistake a rising price for lower risk.
The real rule is to pick an allocation you can live with when market news is worst.
- 90 percent equities, 10 percent bonds
- Buffett's suggested split
- Nearly 19 percent over 60 years
- Buffett's average annual return
- Nearly 11 percent over same period
- S&P 500 comparison
- Ryan Dykmans, CFA
- Advisor
Why it mattersYour investment strategy should fit your age and ability to stomach losses. A cookie-cutter rule can sabotage long-term wealth if it forces you to sell at the wrong time.
AustraliaAustralian investors following Buffett's advice should assess their own risk tolerance before copying his suggestion; younger and older savers may need different approaches.
