Lazy investing portfolio: a beginners guide

If you want a hassle-free investment strategy you’ve come to the right place. Welcome to the world of passive investing. We’ll be your guide.


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lazy investing portfolio
Lazy investing portfolio: a beginners guide. Source: Adobe Stock.

As with everything in the world of finance, a lazy investing portfolio has a fancy technical name designed to make things look more trustworthy. It’s called a passive investing strategy. Beautiful, right? You’re free to use that next time somebody calls you lazy. “I’m not lazy. I have a passive life strategy.”

Jokes aside, not everyone is nerdy enough to feel intellectually stimulated by analyzing macro and microeconomic data. Keeping track of FED meetings, interest rates, companies’ balance sheets and price action charts takes up a lot of time. Most of us don’t want to plant the tree. We just want the fruit. And that’s fine as long as you know where to find the tree and which trees will give you good fruit, and not poisonous ones.

With investing it’s pretty much the same. You can start investing knowing close to nothing about it. You might even get lucky and reap some great fruit. But if you rely solely on luck, at some point probability will get you. You will eat poisonous fruit and at best suffer with a long-lasting diarrhea. 

So if you are not interested in learning how to plant the tree, you must at least know which ones will give you fruit you can eat. Not only that. Sometimes a fruit tree doesn’t look like a fruit tree because it hasn’t grown any fruit yet. You must be able to identify that tree and wait patiently for the fruit to come out. The same goes for investing.

In this article you are going to learn how to build a lazy investing portfolio by spotting the best long-term opportunities, as well as income investments designed to provide a steady source of income with minimum effort.

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What is a lazy portfolio?

lazy investing portfolio
What is a lazy portfolio? Source: Adobe Stock.

A lazy investing portfolio is made up of a collection of investments which require very little effort to maintain. When you think about this kind of portfolio you are not looking to buy and sell stocks frequently. Quite the opposite. You want to live your life doing whatever matters most to you, while your money grows automatically.

One common strategy used in passive investing is known as “buy-and-hold”. This means exactly what it says: you buy stocks, REITs, ETFs or any other financial asset you please, with the express purpose of holding them for a long period of time. This selection doesn’t happen in random fashion. As a rule you want to buy papers from solid companies or funds which have a robust future growth perspective.

There are also income investment strategies like dividend investing. This is when you buy a security not because you expect its price to increase over time (although you must include this in your analysis) but because you want to receive regular payments from these companies. Income investing is one of the laziest investment strategies you will find.

Are lazy portfolios the best?

It all depends on your investment profile. If you are looking for aggressive returns you need an aggressive investment strategy. That doesn’t come without a good dose of research and study. Some people may even feel motivated by more than just the money, but by the drive of understanding the scenario and testing their theses by putting money on the line.

These are people who will sit down with charts and spreadsheets for hours, follow the news on a daily, sometimes hourly basis, and read every piece of information they can get for weeks, months, sometimes years. If you like this kind of challenge, a lazy investing portfolio is not what you want. However, if you are too busy doing something else, go for passive investing, but don’t expect overnight life-changing returns.

How to build one for yourself step-by-step

lazy investing portfolio
How to build a lazy portfolio? Source: Adobe Stock.

If you’ve decided a lazy investing portfolio is for you, read on to learn about some of the most popular passive investing strategies used by experienced investors.

Index Funds

With index funds you have access to a balanced lazy investing portfolio containing the biggest companies that make up a stock index. This means you won’t be selecting individual companies based on their performance. Rather, you will be betting on the market as a whole, which has a tendency to grow over the long run. 

Some index funds will even pay out dividends. You can just buy them in small increments over a long period of time, and the more you invest the more dividends you get. Just remember that if you’re holding something for the long run you should expect bumps along the way. Don’t despair when others do, and you will do well in the long term.

In his “Little Book of Common Sense Investing”, American investor and Vanguard founder John Bogle makes an excellent case for Index Investing. He says that the best strategy to make consistent returns is owning the entire stock market through index funds or ETFs, and then doing nothing. Just sit back and wait.

Mutual Funds

Building a simple portfolio of Mutual Funds is a good way of delegating your selection of stocks or other securities. There are a number of Mutual Funds you can choose from, some focusing on stocks, others on commodities, currencies, bonds, and there are the ones that invest in many types of securities. With this kind of investing you are able to diversify your investments without having to select them yourself. 

A good way of selecting the best Mutual Funds is making sure management has a solid track record of good investments. You can get a nice grip of that by reading about the fund’s managers, learning about their careers and what they have accomplished. You can also try to talk to managers personally to make sure their investment strategy aligns to yours.

One-Fund Portfolio

This is the laziest portfolio ever. You pick one fund, and that’s that. The best way to go about this is to select a balanced fund, usually containing a mix of 60% stocks, 30% bonds, and 10% cash. 

For this kind of investing, however, you must double your attention with the fund’s management. People like to say “don’t put all your eggs in one basket”. Even though this is sound investment advice, if you are a lazy investor you should go with Warren Buffet’s advice: “Put all your eggs in one basket, and then watch that basket!”.

Now that you’ve learn all about lazy investing portfolio, take a look at the link below and read all about what it means to go through a bear market.

What does "Bear Market" mean for investors?

Find out what causes them, and what you can do to protect your investments!

About the author  /  Danilo Pereira

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