The Wisdom of the Lazy Portfolio

Many fans of Your Money or Your Life are risk-averse and some have chosen not to have any involvement in the stock market at all.  Indeed, the first edition of Your Money or Your Life advocated that readers invest the majority of their money in U.S. Treasury Bonds.  But if you read the latest edition of Your Money or Your Life released in December 2008, you know that we included other investment options, including the stock market.  In follow-up to the advice provided in the recent edition of Chapter 9 of Your Money or Your Life by Mark Zaifman, a fee-only financial planner in California, I wanted to direct your attention to a great blog post I found recently on the popular personal finance blog Get Rich Slowly

The advice is simple but profound.  For those willing to invest in the stock market but not willing to invest countless hours of limited life energy on learning the latest stock market tips, consider following a Lazy Portfolio approach.  As author J.D. Roth says, “Lazy portfolios are collections of index funds.  Because these portfolios are balanced — they contain stocks and bonds — they mitigate risk while providing excellent returns.  Best of all, they take very little time to maintain … over the long-term, (index funds) deliver better returns than most actively-managed mutual funds.”

The reason that I like this post “The Lazy Way to Investment Success” so much is because it reflects years of thinking from a variety of respected financial writers in one succinct article.  Better yet, J.D. provides specific examples of tested investment options.

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