Buffett 90/10: the Risk X-Ray
Buffett's instruction for his own estate, published in the 2013 shareholder letter: nine-tenths in a low-cost S&P 500 fund, one-tenth in short-term governments, then leave it alone. It is the most concentrated allocation in this catalog and makes no diversification claim at all. The analysis below quantifies what that concentration means: a portfolio that is, within measurement error, the index itself, with a thin cash cushion whose only job is liquidity in a crash.
Warren Buffett, Berkshire Hathaway shareholder letter (2013), describing the instruction for his estate
Analysis as of Friday 2026-08-28 · recomputed weekly from daily market data · methodology
What the Buffett 90/10 holds
The published allocation: 90% S&P 500 index fund, 10% short-term government bonds.
Where the risk actually sits
Measured through the covariance matrix, VOO dominates the risk budget at 99.9% of total risk for 90.0% of capital; at the other end, SHY accounts for only 0.1%.
| Fund | Share of risk | Risk | Capital | Beta | Role |
|---|---|---|---|---|---|
| VOO | 99.9% | 90.0% | 0.99 | correlated core | |
| SHY | 0.1% | 10.0% | 0.0 | shock absorber |
How the pieces move together
| Holding | VOO | SHY |
|---|---|---|
| VOO 90% | 1.00 | |
| SHY 10% | 0.03 | 1.00 |
Pearson correlation of weekly returns · 156-week common window ending 2026-08-28 · pairbook.io
The worst it would have been
Over the analysis window, this mix would have fallen at worst -15.0% (from the week of 2025-02-21 to 2025-04-11), shallower than the S&P 500's -16.9% over the same weeks, and it has since recovered that peak.
Worst weeks of the mix: -7.9% (week ending 2025-04-11), -3.7% (week ending 2024-09-13), -2.8% (week ending 2024-04-26).
FAQ
Is the 10% bond sleeve doing anything at all?
Almost nothing in risk terms, as the contribution table shows. Its role in Buffett's design is practical: a source of spending money in a downturn so the equity never has to be sold at the bottom.
Who is this allocation actually for?
Buffett prescribed it for a beneficiary with a very long horizon and no need to touch the capital. The drawdown section above shows what holding it requires: living through the index's full declines with almost no cushion.
Run this analysis on your own portfolio
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