For those seeking investment advice, it is worth finding someone who can become a financial mentor. That is, advice you trust and have a good record of performing. In terms of investment advice, it is more respected than Warren Buffett. This is for good reason. He has been providing reasonable financial advice that has helped many people increase their net worth. With this in mind, it makes sense to at least consider the investment advice that appears from him.
Financial analysts read with beautifully-toothed combs whenever Berkshire Hathaway’s annual report is made public. This makes a lot of sense. Many people reading the report hope they can find some insights that can give them an advantage in their own investments. Interestingly, you don’t have to find the investment advice that Buffett thinks most people should follow. It’s because he put it there and made everyone as bright as the day.
Buffett’s advice: Buy index funds and short-term government bonds
In 2013, Warren Buffett famously wrote that he had instructed his wife about the money she should use when she died (here). One might think that this instruction might become very complicated because she will inherit money from the wealthiest people in the world.
The truth is, the advice is actually simple. Warren Buffet wants his wife to invest 90% of its inheritance in a low-cost S&P 500 index tracker. He also suggested that she should invest the remaining 10% in short-term government bonds. That’s it. Nothing good to look at, but it can still be said to be financial advice.
He wrote:
Research has repeatedly shown that few fund managers can surpass the S&P 500 (Morningstar, Dow Jones/Spiva, NBER) for a long time. Knowing that most active fund managers will return less money than S&P 500 funds while charging more fees, these suggestions are really just common sense. This is the way Buffett thinks most people should invest. This is one of the best investors in the world, hoping that their wife will invest when she leaves.
With this suggestion, the problem for many people is that it is boring. Not much excitement every day is that 90% of your funds are used with other 10% of government bonds. At least in the short term, it lacks any kind of sexy.
Another problem with index funds is that they provide you with market performance, but only market performance. This means that index holders will receive returns that track the market, which is not worse, but there is no better return. Therefore, with index funds, investors will never have a chance to beat the market.
In a few years, the index actually lost money. For example, this is the performance of the S&P 500 drawn by the St. Louis Fed. It shows that in 2022, the Standard & Poor actually lost about 20%. In that year, investors are better off holding corporate or government bonds.
Will Buffett practice his preaching?
No, he didn’t.
The reality is that Buffett’s trading behavior and his public statements do not always match. Buffett publicly preached and held it, but his trading behavior was more diverse. In his early career, Buffett used arbitrage technology, short-term trading, liquidation, rather than investing in index funds or using buying and holding technologies he is known for in companies like Coca-Cola. Later in his career, he was able to diversify his portfolio using fixed income arbitrage, currency, commodity drama and other technologies.
If you want to learn more details, get a copy of James Altucher’s book: Trade 
Warren Buffett
Secondly, Buffett certainly did not follow his boring advice and became rich. Much of his career has been spent buying and owning wealthy companies in buying and owning index fund stocks. If you want to know a detailed blueprint for how he does it, consider getting a copy of Snowball: Warren Buffett and Life’s Business
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