former microsoft CEO Steve Ballmer believes most investors should keep things simple, and his own stock holdings are so simple that he relies overwhelmingly on just one stock. .
According to wall street journalMore than 80% of his investment portfolio is Microsoft stocks, and the rest is stock index funds.
“Microsoft outperformed almost every other asset I owned,” he said. journal In a Q&A published on Sunday. “It's a little hard to say it didn't work out.”
Including dividends, Microsoft has returned an average of about 29% annually in recent years, compared to the S&P 500's return of about 13%.
This was boosted by the AI boom sparked by Microsoft-backed OpenAI. Since the release of ChatGPT in November 2022, Microsoft's stock price has skyrocketed, pushing its market cap to over $3 trillion.
Ballmer, who was president of Microsoft from 2000 to 2014, developed his philosophy based on Warren Buffett's advice that individual investors should put their money in an S&P 500 index fund rather than trying to outperform the market. He said that it was formed.
of course, Berkshire Hathaway CEOs don't have 80% of their portfolio in one stock. But Ballmer settled on an unconventional investment strategy after struggling to find a money manager that regularly beat the market.
Currently worth $151 billion Bloomberg Billionaires Indexhe said. journal He said he and his wife “may” have shifted their index funds to only the U.S. and Europe, while also owning assets in Japan. He has also exited private equity and is really only pursuing his top holding, Microsoft.
“I like it. It's simple,” he added. “We are very well off financially. What I'm looking for in this case is not having to spend so much time, anxiety, and brain power in an area where I would be well off if I could earn 7%. Because that's the standard rate of return.'' Over the long term, S&P matters. ”
Mr. Ballmer was vague about which index funds he owns, saying if it wasn't the S&P 500, it would be the small-cap Russell 2000 or “a broad mirror of the market.”
Meanwhile, his other big investment, the Los Angeles Clippers, also appears to be doing well. He bought the NBA franchise in 2014 for $2 billion and is now worth $5.5 billion. According to Forbes.
When asked if his strategy could be applied to regular investors, he said, “Unless you're really trying to become an expert, I would say, 'Keep it simple.'”
