Warren Buffett's Estate Will Be Invested In Only 2 Things After He Dies
Legendary investor Warren Buffett has always been blessed with an uncanny ability to plan far into the future, so it may come as no surprise that he has already planned how he wants his estate to be invested after he dies.
In a 2013 letter to shareholders, Buffett personally disclosed his instructions to his trustee.
“My advice to the trustee could not be more simple. Put 10 percent of the cash in short-term government bonds and 90 percent in a very low-cost S&P 500 index fund. I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions, individuals – who employee high fee managers,” Buffett wrote.
Detroit News Finance Editor Brian O’Connor recently took a look at how this strategy would have performed compared to the performance of hedge funds in recent years.
From the beginning of 2012 to the end of 2015, the ProShares Trust (NYSE: HDG), which seeks to replicate the performance of hedge funds, was up 7.5 percent. In that same period of time, O’Connor’s “Buffett Index,” based on the S&P 500 and the Barclays U.S. Treasury Index, was up 69 percent.
By comparison, Berkshire Hathaway Inc. (NYSE: BRK-B)’s share price was up 10.0 percent during that same time period.
Investors interested in mimicking Buffett’s two-pronged strategy may want to consider investing in the Vanguard 500 Index Fund (NYSE: VOO) and the iShares Barclays 1-3 Year Treasry Bnd Fd (NYSE: SHY).
Disclosure: The author holds no position in the stocks mentioned.
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