Buffett vs. Swensen (3/14)

Recently, Warren Buffett provided his index fund portfolio recommendation. How does Buffett’s recommendation compare to David Swensen’s, and which asset allocation is better?

The article below explains that Buffett, the world’s leading fundamental investor, advises his trustee to target aggressive growth with 90% S&P 500 and 10% cash. Unfortunately, this 90/10 mix is too aggressive for most folks.

At ETF PM, we prefer Swensen’s prescription for a growth benchmark because his offers far more diversification. See our article,  “The Best ETFs for a Growth Portfolio.”

How you can build on Warren Buffett’s investment advise

John Wasik, 3/10/14

While it is hard to knock the advice of Warren Buffett, whose annual letter to Berkshire Hathaway Inc shareholders recently lofted down from the mountain of capitalism, some of his tips can be tweaked.

Among the many nuggets of wisdom in the Berkshire report was a recommendation from the company’s chairman to the trustee of his estate that 10 percent of the cash be invested in short-term government bonds and 90 percent in a “very low-cost index fund (Vanguard’s).”

Buffett is spot on about holding onto an index fund and avoiding the exorbitant fees of active managers. But we should look at his advice a bit more closely.

Click here for the full article.

 

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