Are you tired of market fluctuations? Buffett’s 90/10 rule helps you stay calm

Financial headlines have been mixed this year. Stocks in the world’s largest companies have repeatedly experienced significant fluctuations. Experts warn of an AI stock bubble ready to burst. Your portfolio can feel like it’s on a roller coaster. You are worried that your investment portfolio may collapse with the upcoming market fluctuations.

But Buffett’s 90/10 rule could serve as a motion sickness pill on the stock market’s next wild ride. This simple strategy calls for investing 90% of your portfolio in low-cost index funds and 10% in Treasury bonds. Buffett’s approach can help you keep your focus on the smoother long game – not on short-term fluctuations that will then become someone else’s problem.

What is the 90/10 strategy?

Buffett first shared the 90/10 investing rule in a 2013 letter to Berkshire Hathaway Inc. shareholders. (BRK.A, BRK.B). His advice: Put 90% of your money in a low-cost S&P 500 index fund (such as VOO) and 10% in short-term U.S. Treasuries. This isn’t just advice for others. Buffett wrote: “My money…is where my mouth is.” “What I am advising here is essentially identical to some of the instructions I put in my will.”

By having confidence in long-term stock market growth while maintaining a small safety cushion in bonds, the 90/10 approach aims to take advantage of decades of compounding — the way yields generate ever-higher returns in a snowball effect — without the high fees or emotional stress of constant trading.

This strategy is more aggressive than the traditional 60/40 portfolio, but it is intentionally simple. The formula achieves more by encouraging investors to put in less effort. He urges investors not to try to time the market. Don’t buy more Nvidia (NVDA) stock just before the chip maker’s next earnings report. Don’t bet your retirement nest egg on whether some tech companies beat analyst estimates.

Instead, using the 90/10 strategy, you own small slices of the 500 major U.S. companies that make up the S&P, from tech giants to health care companies to consumer staples. When one hole forms in a stock, 499 others can soften the blow. When others sell out of panic, your long-term portfolio barely notices because it’s not playing that game.

The 90/10 rule for a mid-2020 wild market run

Wall Street is witnessing record volatility in its largest stocks, causing great pressure on investors. There were 119 single-day swings of $100 billion or more in the value of stocks like Oracle (ORCL) in 2025 — a record and nearly four times the number during the 2022 bear market.

“Fragility events,” as Bank of America analysts call them, are fueled by factors such as fast-moving traders, bets on short-term options, and highly leveraged funds tied to big technology names like Nvidia, Alphabet (GOOG), and Tesla (TSLA). For everyday investors, the 90/10 rule means you don’t have to worry about or even know about technical market issues that cause the market to fall or rise in a matter of hours — often for reasons that have nothing to do with the fundamentals of the company that Buffett values ​​when buying stocks.

This is where Buffett’s 90/10 rule comes into play. Instead of chasing headlines or trying to time the next swing, it keeps you focused on what has consistently worked in the past: time in the market, not timing the market. With 90% in a broad index and 10% in safe-haven Treasuries, you can automatically diversify between different, less risky assets when the market fluctuates.