Build Your Own "Lazy" Portfolio: Strategies for Diversified Investing

Investing doesn’t have to be complicated. In fact, some of the most successful investors take a hands-off, low-maintenance approach. If you’re overwhelmed by the noise of financial news or feel paralyzed by too many choices, a “lazy portfolio” might be the perfect solution. Designed for simplicity and long-term growth, lazy portfolios require minimal effort, while offering strong diversification and solid performance over time.

What Is a Lazy Portfolio?

A lazy portfolio is a set-it-and-forget-it investment strategy that uses a small number of diversified index funds or ETFs (exchange-traded funds). These portfolios are constructed to weather market fluctuations, minimize fees, and require very little active management. Instead of chasing trends or picking individual stocks, lazy investors build wealth slowly and steadily by sticking to a plan.

The idea is simple: combine broad-market funds in a way that balances risk and reward, then leave it alone—aside from the occasional rebalancing.

Why Go Lazy?

• Low Cost: Index funds and ETFs typically have much lower fees than actively managed mutual funds.
• Diversification: With just a few funds, you can get exposure to thousands of stocks and bonds globally.
• Low Effort: Once your portfolio is set up, you may only need to rebalance once or twice a year.
• Proven Performance: Many lazy portfolios have historically matched or outperformed most actively managed portfolios over the long term.

Popular Lazy Portfolio Strategies

Here are some tried-and-true lazy portfolios that have stood the test of time:

1. The Three-Fund Portfolio

This classic approach includes three broad index funds:

• U.S. Total Stock Market Index Fund (e.g., VTI)
• International Stock Market Index Fund (e.g., VXUS)
• Total Bond Market Index Fund (e.g., BND)

You can adjust the percentages based on your risk tolerance—for example, 60% stocks and 40% bonds for moderate risk.

2. The Bogleheads Portfolio

Named after Vanguard founder John Bogle, this strategy promotes a mix of index funds emphasizing simplicity and discipline. It's often the same as the three-fund portfolio, but with more emphasis on keeping costs low and staying the course.

3. The Couch Potato Portfolio

This tongue-in-cheek name represents the idea that you can be a lazy investor and still succeed. A simple version includes:

• 50% U.S. Stock Index Fund
• 50% Bond Index Fund

It doesn’t get much simpler, and it has performed surprisingly well over decades.

4. The All-Weather Portfolio

Originally created by hedge fund manager Ray Dalio, this portfolio is designed to perform well in any economic condition. A typical breakdown might include:

• 30% Stocks
• 40% Long-term Bonds
• 15% Intermediate Bonds
• 7.5% Gold
• 7.5% Commodities

While a bit more complex than others on this list, it’s still relatively passive and offers great diversification.

How to Build Your Lazy Portfolio

1. Choose Your Strategy: Pick one of the above portfolios (or tweak it to your liking).
2. Select Your Funds: Use low-cost index funds or ETFs. Vanguard, Fidelity, and Schwab all offer excellent options.
3. Open a Brokerage Account: Use a platform like Vanguard, Fidelity, Charles Schwab, or even robo-advisors like Betterment or M1 Finance.
4. Allocate Your Money: Set your percentages and invest your money accordingly.
5. Automate Contributions: Set up recurring deposits to invest consistently over time.

Rebalancing: The Only Maintenance You Need

Once or twice a year, check your portfolio to see if your allocations have drifted. If they have, sell some of the overperforming assets and buy more of the underperforming ones to get back to your original percentages. Rebalancing keeps your risk in check and helps you stick to your plan.

Common Mistakes to Avoid

• Overcomplicating It: More funds don't always mean better diversification. Keep it simple.
• Market Timing: Don’t try to guess when to buy or sell—just stay the course.
• Ignoring Fees: Watch out for expense ratios, advisor fees, and trading costs that can eat into returns.
• Neglecting Rebalancing: Even lazy portfolios need occasional check-ins.

Final Thoughts

You don’t need to be a Wall Street pro to build wealth through investing. Lazy portfolios offer a smart, proven path for long-term growth with minimal effort. Whether you’re just starting out or looking to simplify an overly complex portfolio, this strategy can help you stay focused, stress less, and watch your money grow.

Choose a strategy that fits your comfort level, automate your investments, and trust the process. Sometimes, doing less really is more—especially in investing.

Written by Emily Carter