What is the Warren Buffett Portfolio? Let the Oracle Show You High Returns

Warren Buffet portfolio

Warren Buffet’s portfolio is exposed to 90% stocks 10% bonds. It can be built with 2 ETFs. The portfolio is a high-risk portfolio.

For the past 10 years, the Warren Buffet’s portfolio has returned 12.33% with a standard deviation of 15.79%. The current dividend yield is 1.73%. The 30-year return is 10.06%. Year to date Warren Buffet’s portfolio has returned 10.51%. Last year it returned 28.66%.

What is the return of Warren Buffett’s portfolio?

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
Warren Buffett Portfolio210.5128.6612.33%10.0630.04%

How do you build the Warren Buffett portfolio with ETFs?

  • 90.00% Large-cap blend (S&P 500) (VOO)
  • 10.00% Short-Term Treasury ETF (VGSH)

Who is Warren Buffett?

One of the things that got me into investing many years ago was the origin story of Warren Buffett. Warren Buffett is a self-made billionaire who invested in the right companies at the right time and has made himself and his investors very rich. He is probably the greatest investor so far in human history. He is known as the Oracle of Omaha

Warren Buffett used to made use of exclusively value investing. Value investing is the practice of investing in undervalued companies until their true value emerges. Warren Buffett has to a large moved away from value investing. This is in large part due to his long time friend and investing partner, Charlie Munger. Charlie Munger has influenced Warren Buffett in that Warren Buffett now invests in great companies at a fair price. This is a big change from his previous investing practices where he invested in cigar bud companies. 

Here is a great interview where Warren Buffett gets time to dish out tons of investment wisdom. He is interviewed by the legendary Carol Loomis, who was a good friend of Warren Buffett.

The best book on Warren Buffet that I have read is The Snowball: Warren Buffett and the Business of Life. It is a detailed book and unfolds in-depth Warren Buffett’s’ entire life. It is well worth a read.

The Snowball Warren Buffett and the Business of Life

Warren Buffett’s teacher was the late Benjamin Graham. Benjamin Graham was a dedicated value investor and wrote the bible on value investing with his book The Intelligent Investor.

That book is considered by many to be the best book on investing and the first book on investing you should read. I disagree with that statement and find it useful as a historical account of how investing used to be performed before the information was democratized by the internet. Nowadays it is very hard to find undervalued companies. See our article  Meet Susan: The Most Important Question In Investing why this is. If you want to see which books I recommend you should see the post 55 Best Investing Books: Boost Your Money and Awesome Brain.

The older Benjamin Graham had shifted positions and was in many regards a fan of index funds. He made many of the same conclusions based on The Relentless Rules of Humble Arithmetic that Jack Bogle would arrive at years later. Read Benjamin Graham’s lecture Securities in an Insecure World to learn more.

“The goal of the non-professional should not be to pick winners – neither he nor his “helpers” can do that – but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.”

– Warren Buffett

Charlie Munger is Warren Buffett’s long time friend. He is made famous by being a very astute investor and by always being referenced by Warren Buffett as “much smarter than me” and “Charlie always says…”

If you don’t think investing books are for you but smart thinking is you should pick up Poor Charlie’s Almanack, The Wit and Wisdom of Charles T. Munger. It is a fantastic book to have at your side. It is somewhat pricey but it is a beautiful hard-cover printed book with gorgeous illustrations and very good content. It has all 5-star reviews on Amazon.

poor-charlies-almanack-the-wit-and-wisdom-of-charlie-munger

Description of the Warren Buffett portfolio

In the 2013 letter to shareholders, Warren Buffett recommended that a trust is set up for his wife. This trust would invest 90% in a large-cap low-cost index fund (he recommended Vanguard) and 10% in short-term government bonds. He has since on several occasions reiterated this with the addition that average investors would be best served by low-cost index funds. You can read the entire letter here. There is also a deluxe version available as Max Olsen has collected all the shareholder letters in paper format.

It should be noted that the Berkshire-Hathaway shareholder letters are not your typical vacuous pompous tours (and detours) of how great the leadership has done the previous year. On the contrary. Warren Buffett is humble and throws off tons of investing and life wisdom in every one of the shareholder letters. I consider the shareholder letters Warren Buffett’s written legacy as he will probably never publish a book other than the shareholder letters.

Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers.

– Warren Buffett, 2013 letter to shareholders

Resources for the portfolio

There is a TON of great resources if you want to know more about Warren Buffet. I don’t believe that we can replicate Warren Buffett’s investing strategy. He is still very fascinating to read about though. My recommendation is to avoid the books telling you how to mirror his investing style and instead do what Warren Buffett recommends.

Here is the short list of very good books on Warren Buffett:

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