How to Build the Your Very Own Lazy Portfolio

If you’re someone who likes to take it easy and doesn’t want to put in a ton of effort into managing your investments then a lazy portfolio might just be your ticket to financial success . This passive investing strategy is perfect for those who have a long term investment horizon of 10 years or more and don’t need immediate access to their money . It’s all about setting it and forgetting it which means you don’t have to stress about every little market fluctuation.

So why is being lazy a good thing in investing well with a lazy portfolio you can actually achieve above average returns while taking below average risks . It’s like getting the best of both worlds . This simple and straightforward approach has a few key features that make it work wonders for your financial goals.

1 . Go with the Flow : Index Investing and Automation

One of the easiest and most effective strategies for a lazy portfolio is index investing . Instead of trying to outsmart the market by picking individual stocks you simply aim to match the performance of a specific market index like the S&P 500 . By investing in a wide range of companies within that index you get instant diversification and reduce the risk associated with individual stock picks.

To make your life even easier automate your investments . Set up regular contributions from your paycheck or bank account to your portfolio . This way you don’t have to worry about timing the market or remembering to invest regularly . It’s all taken care of automatically and you can sit back and watch your money grow.

2 . Ride the Waves : Dollar Cost Averaging

Timing the market is a fool’s game and lazy investors know better . Instead of trying to figure out the best time to invest a lump sum embrace dollar cost averaging . This means investing a fixed amount of money at regular intervals regardless of market conditions . By doing this you’ll buy more shares when prices are low and fewer shares when prices are high . Over time this strategy can help smooth out market fluctuations and potentially increase your returns.

3 . Keep It Balanced : Yearly Rebalancing

Even though you’re taking a lazy approach to investing it’s still important to keep your portfolio in check . That’s where yearly rebalancing comes into play . Take the time once a year to review your portfolio’s asset allocation and make any necessary adjustments . Some investments may perform better than others throwing off your desired balance . By rebalancing you can sell off some of the winners and buy more of the underperformers bringing your portfolio back to its intended mix.

This disciplined approach helps you avoid getting caught up in the excitement of hot trends and keeps you on track with your long term goals . It’s like giving your portfolio a little tune up to keep it running smoothly.

4 . Set It and Forget It : Consider Target Date Funds

If all this talk about asset allocation and rebalancing still sounds like too much work don’t worry . There’s an even lazier option available : target date funds . These funds do all the heavy lifting for you . All you need to do is pick the fund that aligns with your expected retirement date and it automatically adjusts its asset allocation over time . As the target date approaches the fund becomes more conservative shifting towards a mix of bonds and cash equivalents.

With target date funds you can say goodbye to the stress of selecting and managing individual investments . The fund’s professional management team takes care of all the hard work . It’s like having your own personal financial advisor minus the hefty fees.

In conclusion building the best lazy portfolio is all about simplicity and relaxation . By embracing index investing , automation , dollar cost averaging , yearly rebalancing and possibly considering target date funds , you can kick back and enjoy the benefits of a low maintenance investment strategy . Just remember to stay disciplined and stay the course . After all it’s called a lazy portfolio for a reason .