When Buffett says “the village idiot could have made it,” he is not claiming markets only go up.

He means ordinary savers who own productive American businesses and leave them alone have historically built real wealth, while many hurt themselves by chasing fashionable assets, trading too often, or overcomplicating their plans, according to Moneywise.

That message lands at a tense moment for anyone nearing retirement. Stocks fell on Nov. 10 after a hotter-than-expected inflation report pushed Treasury yields higher.

This revived fears of more Federal Reserve rate hikes, with markets moving from doubting two more increases to effectively pricing in three, before stocks rebounded the next day.

Days like that test whether savers still believe America is a wonderful place to invest, and that is when Buffett’s simple rules matter most.

Warren Buffett’s advice: Own a broad slice of American business

The first step is the one Buffett has repeated for years. In his 2016 letter to Berkshire Hathaway shareholders, he wrote that his regular recommendation for investors has been a low-cost S&P 500 index fund, according to Berkshire Hathaway.

An index fund lets savers own hundreds of large U.S. companies without having to pick winners.

Also read: Warren Buffett has a stark message for stock market investors

He has also put money behind that view. In 2007, Buffett bet $1 million that an S&P 500 index fund would beat a basket of hedge funds over 10 years, and the Vanguard fund returned about 7.1% a year against roughly 2.2% for the hedge funds, according to Berkshire Hathaway.

His own family plan follows the same logic. Buffett has said the cash he leaves for his wife should go 90% into a very low-cost S&P 500 index fund and 10% into short-term government bonds.

That split was designed for his wife’s inheritance, so it works best as a starting point rather than a rule for every retiree.

The case for indexing has only grown stronger. About nine in 10 actively managed large-cap funds have trailed the S&P 500 over rolling 15-year periods, and the share across domestic funds is higher still over 20 years.

For most savers, simply matching the market has beaten paying someone to try to outrun it. One caveat is that an S&P 500 fund holds no foreign companies, so some investors add an international fund.

Keep costs low and skip the hot-stock chase

“Costs really matter in investments,” Buffett has said, and his bet against the hedge funds showed exactly why. The managers running those funds charged far more than a plain index fund, and over 10 years, that drag showed up in the returns.

Shave a quarter point off annual expenses and the difference looks trivial; run it out over three decades and it turns into real money, as Buffett has explained.

That discipline is being tested by the AI boom. When asked whether a retiree should own AI stocks, Jeff Bezos said he would usually recommend buying the S&P 500 instead, and about 35 cents of every dollar in the index already sits in the Magnificent 7, as reported by TheStreet. An index investor already owns the biggest AI names without betting the nest egg on them.

The bigger danger is often the investor, not the market itself. Behavioral finance expert Bradley Klontz said people tend to buy when stocks are rising and sell when they fall, arguing that they are chasing what feels good now over what builds wealth across decades.

For those who still want individual stocks, Buffett’s habit of treating a share as part of a real business helps. That means checking how a company earns money, whether it has lasting advantages, how much debt it carries, and whether its valuation makes sense, Moneywise explained.

Buffett’s “bet on America” works best over long stretches, and retirees have less time to wait out a slump.

Jelena Danilovic / Getty Images

Match your investment mix to your timeline

Buffett’s “bet on America” works best over long stretches, and retirees have less time to wait out a slump. The right blend of stocks, bonds, and cash depends on your time horizon and how much risk you can stomach. Investors who need their money sooner may prefer less volatile holdings, the SEC’s Investor.gov noted.

Timing the withdrawals is where things get tricky. A stretch of weak returns at the start of retirement, layered on top of regular withdrawals, can eat through a portfolio far quicker than the same losses later on.

Some planners keep one to three years of essential expenses in cash or short-term bonds as a buffer, pull back on withdrawals after a down year, and run scenarios that model what a 20% drop in year one or two would actually do to the plan.

The long game still pays for those who stick with it. Fidelity counted a record 769,000 401(k) millionaires on its platform at the end of June, up from 654,000 a quarter earlier.

The average member of that group is 58 and has been saving for about 25 years, according to 24/7 Wall St. That looks a lot like Buffett’s patient approach in action.

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A large pretax balance is a good problem to have, though it comes with a deadline. The government requires withdrawals starting at age 73 or 75, depending on when you were born, and those distributions are taxed as ordinary income whether you need the money or not.

Retiring early gives savers a window to convert chunks of that balance into a Roth and pay the tax at a lower bracket before the forced withdrawals begin.

Plan around inflation, and get help when it counts

Social Security is responding to the pressure: The 3.6% benefit increase coming in 2027 is the biggest in four years and will put more money in beneficiaries’ pockets each month.

What it cannot do is replace a growth-oriented portfolio. Retire at 65, and you may be drawing on those savings well into your 90s, which means a nest egg that just keeps up with itself in dollar terms is slowly losing the race against prices the entire time.

Washington has built in some help. Consumer prices were up 3.7% from a year earlier in September, and Congress added a $6,000 deduction for taxpayers 65 and older that stays on the books through 2028.

For those still working, putting money into a 401(k) before taxes reduces what the IRS sees each year, and that benefit gets more valuable the higher a saver’s income climbs.

Simple does not mean one-size-fits-all. Your mix of stocks, bonds, and cash should reflect your age, retirement date, income needs, and tolerance for losses, and larger portfolios may benefit from professional help with withdrawals, taxes, and making the money last.

Related: Warren Buffett endorses this Vanguard ETF for young investors