90/10 Strategy

Legendary investor Warren Buffett invented the “90/10 investing strategy for the investment of retirement savings. The method involves deploying 90% of one’s investment capital into interest-bearing instruments which present a lower degree of investment risk while allocating the remaining 10% of money towards higher-risk investments. This system is a relatively conservative investment strategy which aims to generate higher yields on the overall portfolio. Following this method, proponents profess the potential losses will typically be limited to the 10% invested in the high-risk investments. However, much depends on the quality of the interest-bearing bonds purchased.