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Author: sheople2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Buffett give portfolio allocation guidelines? Date: 2/29/2008 11:05 PM
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Does Warren Buffett give any portfolio allocation guidelines/recommendations for the common investor?

I'm told this chart below is misleading, because it only shows the worst year, not all of the bad years:

https://personal.vanguard.com:....ontent.jsp


Thanks.
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Author: sheople2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61771 of 75381
Subject: Re: Buffett give portfolio allocation guidelines Date: 2/29/2008 11:07 PM
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Oops, here's the link...

https://personal.vanguard.com:443/us/planningeducation/general/PEdGPCreateTheRightMixContent.jsp

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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61773 of 75381
Subject: Re: Buffett give portfolio allocation guidelines Date: 3/1/2008 9:41 AM
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I doubt Buffett is giving advice to small investors other than to buy Berkshire Hathaway stock and hold it.

Re the graphs, I have no problem with not showing data for all years. I focus on the average annual returns and the number of years with losses. Note in the heavy stock allocations there's relatively little difference in the years with losses. Same with the heavy bond allocations. So can you sleep at night with 25% of the years losing money? If not, stick to a balanced of bond weighted portfolio.

My bigger concern is with those average annual returns. Note that both the highest gains and biggest losses occured in the 1930's. How much is that skewing the returns? Not believing we will repeat the Great Depression, but believing a repeat of the 1970's is possible, I'd prefer seeing results for the post WW II period only. Seems more relevant to current investing to me.

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Author: vickifool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61774 of 75381
Subject: Re: Buffett give portfolio allocation guidelines Date: 3/1/2008 11:20 AM
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My bigger concern is with those average annual returns. Note that both the highest gains and biggest losses occured in the 1930's. How much is that skewing the returns? Not believing we will repeat the Great Depression, but believing a repeat of the 1970's is possible, I'd prefer seeing results for the post WW II period only. Seems more relevant to current investing to me.

Here's a link to Shiller's data so you can use what you like. This is the data that most of the published figures are based on.
http://www.econ.yale.edu/~shiller/data.htm

And here's a link to Prof. Peter J. Ponzo where you might be able to download a spreadsheet to modify.
http://gummy-stuff.org/index.html

Let us know what you come up with.

Vickifool

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Author: sheople2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61783 of 75381
Subject: Re: Buffett give portfolio allocation guidelines Date: 3/1/2008 10:41 PM
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billjam,

Of the three time frames they mention in this chart what number of years do the following refer to? Vanguard doesn't state this.

-short to mid time horizon
-mid to long
-long

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Author: Ringfinger Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61794 of 75381
Subject: Re: Buffett give portfolio allocation guidelines Date: 3/3/2008 9:41 AM
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I heard Buffett on CNBC this morning. he said for the average investor, investing in equities through low cost index funds is what he would reccommend.

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 61837 of 75381
Subject: Re: Buffett give portfolio allocation guidelines Date: 3/8/2008 10:19 PM
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I doubt Buffett is giving advice to small investors other than to buy Berkshire Hathaway stock and hold it.

Actually, he has stated on many occasions that the best strategy for most people is to buy low-cost mutual funds, invest regularly, and hold for many years.

Acme

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