It’s a buzz word for passive investing over active investing. In other words, ignore the gurus and the pitchmen, ignore financial TV, and determine your portfolio allocations, then set it and forget it.
Every one of our eight Lazy Portfolios is beating the S&P 500 by as much as five percentage points on the longer-term retirement benchmarks of 3-, 5- and 10-year returns. And they’re respectably close on the more volatile one-year basis. Fabulous benefits, and no time wasted with risky stock-picking and short-term trading.
I have an Audioboo about to be uploaded where I mention Toyota stock ($TM) and efficient markets. Everything known about the stock is priced in, right? So, the Lazy Portfolio would just ignore trying to time the buys and sells, and just reset target allocations across index funds or ETFs. No more stock picking our trying to figure out where investors may be leaning the wrong way.
The bottom line is that active investors struggle to beat index funds over the long term. Should one even bother to try?
I will stick with my current strategy and the Black Box, but I think it’s always good policy to look at other means to the end.