'Lazy Portfolios' update: good news
8 winners in bull and bear markets, best strategy for passive investors
Paul B. Farrell
Last update: 1:22 p.m. EDT April 8, 2008
ARROYO GRANDE, Calif. (MarketWatch) -- Now for the good news from the "Lazy
Portfolios" files. While the rest of America is crying about the first quarter 2008 as "one of
the worst three months in a decade," we've got eight great portfolios that keep winning in
bear and bull markets.
That's right, every one of our eight Lazy Portfolios beat the S&P 500 on all three performance
benchmarks -- one-, three- and five-year returns. Every Lazy Portfolio beat the S&P 500's five-
year average by at least 0.2 percentage points to as much as 6.2 percentage points, according to
research by Morningstar Inc.
This is impressive because not only are their asset allocations rarely changed, but some have
been unchanged for almost a decade and still beat the S&P 500.
Get it? These portfolios are virtually "zero maintenance!" Set them and forget them. Plus you can
ignore Wall Street's relentless, misleading chatter about markets and the economy. Seriously.
After customizing your own Lazy Portfolio you can ignore the news and focus on what's really
important: your family, loved ones, friends, your career, hobbies, travel -- you name it --
anything but wasting time tracking and playing the market.
How to set up your portfolio? Easy. Use our
six basic rules
in customizing your own Lazy
Portfolio, beginning with our eight model portfolios below. The rules are simple, all derived
from the Nobel Prize-winning "Modern Portfolio Theory:"
Asset allocation outperforms stock picking
Compounding builds long-term asset values
No-load index funds beat actively managed funds
Buy and hold, adding new money from savings
Market timing and active trading is a loser's game
Trust yourself, you're the expert, do-it-yourself
Sound too simple? Well, that's what Wall Street will tell you: Especially all those brokers, active
fund managers and commission-based advisers who love big fat commissions and fees that Jack
Bogle says siphon off 30% or more of your returns. They hate Lazy Portfolios even though the
evidence consistently proves that this is the best investment strategy for the vast majority of
America's 95 million passive investors.
The facts speak loudly. So please review each of the eight Lazy Portfolios below. Especially note
that the number of funds in each portfolio varies from three to 11. Note also, their asset
allocations vary, with equities ranging from 60% to 90%. And see how they're beating the S&P
500 benchmark on both a short-term and long-term basis: