Lazy portfolio: options for filling with assets
Investing can be viewed from two perspectives. For some, it becomes a vocation, a way to realize their ambitions, to gain experience and knowledge in a particular field. Others see investing as a way to earn extra income. They don’t have time and want to get into all the nuances, follow market movements, and analyze trends. In this case, a lazy portfolio is an excellent solution. It is a set of assets that require minimal effort from the investor. All you need to do is open a brokerage account, buy assets, and rebalance them periodically. The lazy portfolio is suitable for those investors who have chosen the “buy and hold” strategy and do not intend to make regular transactions on the stock market.
This option has several characteristics, one of which is low risk. As you know, risk has a direct impact on returns: the higher the risks, the more you can earn. A lazy portfolio is characterized by low profitability, but at the same time, the investor is reliably protected from losses.
Another peculiarity is the long-term nature of the investments. This is due to the fact that the market cycle lasts about 10 years, during which it is necessary to make adjustments to the assets in each new phase. Such a portfolio does not include active management, which means that the investment period here will be 10 years or more. And with such a term, investments should be effective in one or another phase of market movement. Profitability should not be significantly affected by changes in macroeconomic indicators. This can be achieved through asset diversification.The main advantage of a lazy portfolio is its accessibility and ease of management. It can be built even by a beginner or someone who does not want to understand the nuances of the stock market.
There are several options for filling a portfolio, Ray Dalio’s method is considered popular. According to him, 40% of the portfolio should consist of long-term bonds and 30% – of securities of the broad market. Bonds, designed for a medium investment period, occupy 15%, and 7.5% each should be allocated to gold and commodities.
There are other portfolio options, such as 60% stocks and the remaining 40% bonds. The 40/40/20 principle is 40% in stocks and bonds and the remaining 20% in gold. You can also invest equal amounts in broad-market stocks and bonds and real estate stocks.
The lazy portfolio strategy is quite versatile, it is suitable for different markets, in addition, you can invest in shares of different ETF funds by choosing the appropriate option.