I read this book called The Lazy Person’s Guide to Investing about a year ago and have been trying to follow its strategies.  Funny thing is it is more work than my previous method of just buying Vanguard Total Stock Market Index.

Here are my notes from the book.

Couch Potato Portfolio – rebalance once a year

  1. 50% Vanguard 500 Index (VFINX)
  2. 50% Vanguard Total Bond Market Index Fund (VBMFX)

Basic No-Brainer Portfolio

  1. 25% Vanguard 500 Index (VFINX)
  2. 25% Vanguard Small-Cap Index (NAESX)
  3. 25% Vanguard European Stock Index (VEURX)
  4. 25% Vanguard Total Bond Market Index Fund (VBMFX)

Kiplinger’s Keep-It-Simple Version of the Laziest Portfolio

  1. 25% Large-Cap Stock Funds – Vanguard 500 Index or the Vanguard Total Stock Market Index
  2. 25% Foreign Stock Funds – Vanguard European Stock Market Index or Vanguard Total International Stock Market Index
  3. 25% Small-Cap Stock Funds – Vanguard Small-Cap Index or Vanguard Small-Cap Value Index Fund
  4. 25% Domestic Bond Funds – Vanguard Total Bond Market Index Fund or more conservative Vanguard Short-Term Bond Index Fund

Consider buying shares in Berkshire Hathaway, it is the only thing that seems to consistently beat the market (this was not in the book, it just mentioned what Warren Buffet does).

Ultimate Keep-It-Simple Portfolio for Dummies

  1. 33% Vanguard Total Stock Market Index (VTSMX)
  2. 33% Vanguard Total International Stock Market Index (VGTSX)
  3. 33% Vanguard Intermediate-Term Tax Exempt Fund

Dilbert’s Fab-u-lous One-Page Personal Finance Book

  1. Make a will.
  2. Pay off your credit cards.
  3. Get term life insurance if you have a family to support.
  4. Fund your 401(k) to the maximum.
  5. Fund your IRA to the maximum.
  6. Buy a house if you want to live in a house and can afford it.
  7. Put six months’ expenses in a money market account.
  8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund.  Buy the directly from the fund company and never touch them until retirement.
  9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage fee based on your portfolio’s size.

Diblert’s Anti-Weasel Defense Portfolio

  1. 70% Vanguard Total Stock Market Index (VTSMX)
  2. 30% Vanguard Total Bond Market Index Fund (VBMFX)

Second Grader’s Starter Portfolio

  1. 60% Vanguard Total Stock Market Index (VTSMX)
  2. 30% Vanguard Total International Stock Market Index (VGTSX)
  3. 10% Vanguard Total Bond Market Index Fund (VBMFX)

Frank Kim’s Portfolio :-)

  1. 66% Vanguard Total Stock Market Index (VTSMX)
  2. 33% Vanguard Total International Stock Market Index (VGTSX)

I have nothing in bond funds since this is for my retirement.  We’ll see how we do. :-)

You can read more in this recent article, ‘Lazy Portfolios’ 8 winners for a bear-recession by Paul Farrell.

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3 Responses to “The Lazy Person’s Guide To Investing”

Ed wrote a comment on August 6, 2008

The Lazy Portfolio winners all beat the S&P 500 because they diversified away from US stocks. In particular, foreign stocks have done well because of the dollar’s decline.

seonghuhn wrote a comment on August 6, 2008

The Lazy Portfolios have proven to beat the S&P 500 in the long term too. I think having bonds in the portfolio actually helps because it significantly reduces downside risk.

fkimplicity » Efficient Markets sent a pingback on October 9, 2008

[...] Yet I still believe in them mostly because of this book, A Random Walk Down Wall Street, as well as The Lazy Person’s Guide to Investing and to a lesser extent, Beating the [...]

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