The Best Portfolios For Lazy Investors (2021)

This article originated from my blog: Investing Beanstock

Join My Tele Channel Here For Updates!

So you want to start investing? After spending countless hours or even just 5 minutes trying to read up on the stock market and the confusing world of investing, where do you start?

Before you begin, it is important to understand why we invest and what are some of the benefits of investing. I have a few friends who asked me: “If investing is so profitable and compound interest is so amazing, why isn’t everyone investing?“

And the reason to this is simple: Most people want to get rich quick, so they take shortcuts, over leverage and over estimate their own potential. If you have never done algebra in your life, and you attempt an algebra exam, how well would you fare?

Get Rich Quick, Get Poor Even Faster

And that is what happens to most people who tries their luck in the stock market, trying to trade when they have no prior knowledge to investing. But like most humans (including myself), we overestimate our own abilities and think that we will always be above average.

Without a sound investing mindset, these “shortcut” and “get-rich-quick” mindset individuals get burnt just as quickly as they pour their savings aimlessly, without a clear plan and goal on what they are trying to achieve.

They based everything upon price, without understanding fundamental and technical analysis, so what happens if the price goes down 50%? Do they hold? Do they buy? Do they sell?

And the point is this: Most people are speculators and not actual investors. Speculators think short term and are extremely impatient, wanting to become rich quickly and always succumbing to instant gratification, chasing after the newest product year after year, looking rich on the surface but in reality, poor in mindset and in bank balance, year after year.

Like Warren Buffett says: “Just because you can trade, does not mean you should trade.” This statement is true since the inception of the stock market and it is still true today. Not everyone has the expertise and discipline to be a good trader so rather than trying to outsmart the market, be an investor and adopt a long term mindset, stop timing the market and stop trying to predict what the market will do tomorrow, next week or next month.

In fact, true investing is boring and it is a slow but steady process. Compound interest, won’t really kick off in the initial 10 years and will only compound exponentially in the long run if you have a significant capital. That is why it is important to adopt a long-term horizon when it comes to investing and to understand the difference between short-term cash needs and long-term investment needs.

So You’re Lazy To Understand Investing, What’s Next?

I understand that the majority of people out there don’t even have 1% interest in the stock market, which is completely normal. But you still know the need to invest because simply saving is not a solution especially now that interest rates are at an all time low.

For the lazy investor, you basically have 3 simple options:

1. DIY Dollar Cost Averaging(DCA) into ETFs

2. Mutual Fund/Unit Trust (Buy-And-Forget)

3. Roboadvisors

Even among these 3 options, there are varying degrees of control over the investments and level of passive-ness. If we look at the 3 options from a spectrum, the level of passive-ness would be the following:

Most Passive: Moderately Passive: Least Passive

Unit Trust : Roboadvisors : DIY DCA ETF

Sustainability

Choose a method which you will be able to sustain for a long period of time and if you truly want a passive way to invest, Roboadvisors and Mutual Funds are the most passive method you can ever get.

If you simply want to DIY DCA ETF yourself, do note that with the lack of investing experience and emotions, you may not commit to your plan long term because of market volatilities and the constant urge to try and “time the market”, or worse, you end up not investing at all.

Lazy Man’s Portfolio Guide

For examples sake, I will use a hypothetical $10,000 cash amount to gauge the allocation.

For the lazy investor, I propose the following:

Option 1 (Ultra Low Maintenance Passive Portfolio)

100% Mutual Funds/Unit Trust

Example:

Templeton Global Tech Fund (50%) $5000

Fidelity Greater China Fund (50%) $5000

10 years annualised return: ~14.58%

Annual Fees: ~1.5%

Investing Frequency: Annually/Semi-Annually/Monthly

This is just based on 2 mutual funds which I have access to and by simply contributing to the funds, treat it like a long term savings plan and after 10 years or more you can reap the rewards.

One good thing is any moment there is a shift in style/sector or macro environment, you can switch the fund or allocation to adjust further at no further charge. This option can be a powerful “Core” portion for an investor and set a base for investing for the long run. It is completely hands off approach and purely relying on the fund manager’s active management and expertise while you sit back, relax and continue doing the things you love.

If you are interested in the funds above, do reach out to me to find out how you can get started.

Pros:

1. Buy and Forget

2. Consistent investing = Compounding can take place

3. Potential to outperform the market so fees may be justified

4. Free rebalancing and fund switching

Cons:

1. Not as liquid as DIY or Roboadvisors

2. Recurring Fees of 1.5% or more even if there’s a market downturn

3. Might underperform the market at times

Best For:

1. 99% of investors who have little to no interest in the stock market

2. Wants the human touch of a human advisor to advise on portfolio construction

3. Investors who want market beating funds and willing to pay slightly more fees

Option 2 (Hybrid Passive Investing Portfolio)

50% Mutual Funds 50% Roboadvisor

Example:

Mutual Funds/Unit Funds

Templeton Global Tech Fund $2500

Fidelity Greater China Fund $2500

Roboadvisors

Syfe Equity100 $5000

10 years annualised return: ~10%–16%

Annual Fees: ~1%

Investing Frequency: Monthly/Semi-Annually/Annual

This option is suitable for investor that do not want to fully depend on a mutual fund and want to diversify into ETFs efficiently through a Roboadvisor.

For this portfolio, I chose Syfe’s Equity100 portfolio because I am seeking the highest risk adjusted returns for the long run. Equity100 has diversification across 12 ETFs and exposure to 1500 different stocks globally. Couple this with the 2 strategic mutual funds, it will position a laid back investor with upwards returns in the 2 digits.

Cost wise, it will be lower than Option 1 but return wise half of the portfolio will depend on how well the broad market performs and the underlying ETFs of Syfe Equity100.

Pros:

1. Buy and Forget but flexible contribution via Robo portion

2. Consistent investing = Compounding can take place

3. Potential to outperform the market so fees may be justified

4. Lower fees than Option 1

5. Free rebalancing and fund switching

Cons:

1. Not as liquid as DIY

2. Recurring Fees of ~1% or more even if there’s a market downturn

3. Might underperform the market at times

4. Some may end up timing the market when contributing to Roboadvisors

Best For:

1. Cost Conscious Investors who want to pay lower fees than Option 1 but still want potential market outperformance

2. 99% of investors who have little to no interest in the stock market

3. Wants the human touch of a human advisor to advise on portfolio construction

4. Laid back but still able to outperform the market

Option 3 (Cost Efficient Lazy Portfolio)

60% DIY 40% Roboadvisors

Example:

DIY DCA ETF

Boglehead 3 ETF Simple Portfolio:

1. Vanguard Total World Stock Market ETF (VT) $2000

2. Vanguard S&P 500 ETF (VOO) $2000

3. Invesco QQQ Trust (QQQ) $2000

Roboadvisors

Syfe Equity100 $4000

10 years annualised return: ~8%-12%

Annual Fees: Commission fees (depends on Broker) + Robo fees (0.65% p.a)

Investing Frequency: Monthly/Semi-Annually/Annual

This option is for the cost conscious and those who want to try out investing themselves but still want to be as passive as possible. The caveat for this approach is that you will have the tendency to time the market and prevent yourself from investing consistently. You may be worried about the ETF being overvalued or that a crash is coming and once again end up not investing again.

This portfolio should theoretically incur the least amount of fees out of the 3 options if you choose the right broker to do so. For DIY into US ETFs, I highly recommend Firstrade broker which I use myself due to its zero fees and reliability.

If you decide to use other brokers, do note you need to account into the commission fees paid every time you try to DCA into an ETF, and the fees will really add up in the long run.

This portfolio should be able to bring back market returns consistentlywhich can deliver stable and consistent returns in the long run. Although it won’t outperform the market, if you are happy with the stock market returns, this portfolio may be for you, provided you are disciplined and can execute the DCA consistently.

Pros:

1. Consistent investing = Compounding can take place

2. Cost Efficient and low cost

3. Lower fees than Option 1 and 2 (if you use a good broker)

Cons:

1. Some may end up timing the market which ruins the strategy

2. Difficult to maintain if investor lacks discipline and experience

3. Won’t outperform the market

Best For:

1. Cost Conscious Investors who emphasises paying little to no fees

2. Investors who want certain degree of control over their investments

3. Investors who have some interest in the market and disciplined and long term mindset

Conclusion

And that’s it! Here are 3 different options which a lazy investor can adopt and invest consistently year in year out and let that sweet compounding bring your nest eggs to greater heights with potential returns in the double digits.

The reason I incorporated Roboadvisors into the portfolios is because in today’s day and age, financial institutions have made investing so much more accessible and lowered the barriers for even small investors to get a share of the pie at a low cost such as through a Roboadvisor.

It is really something overlooked by most people and I strongly believe it is a much better way to invest compared to DIY passive ETF approach, because there are way too many ETFs out there and most beginners won’t be able to tell which ETFs are better or even what purpose they serve. Just by paying a small fee of 0.5%-0.8%, you can effectively invest like the rich and get back returns which most beginners will never dream of getting themselves.

So instead of trying to figure out how to construct a proper ETF portfolio yourself and waste time researching, why not just leave it to the experts to do it?

This is why I use Syfe’s Equity100 as well, so that aside from my DIY active investing approach, a part of my portfolio is managed by Syfe and a team of investors who aims to optimise the portfolio as much as possible. I post monthly updates of the portfolio and the latest post on it is here.

So you’re interested in Syfe?

Syfe Promo Code

For people who are interested to invest into Syfe and wants to open an account, you can use the promo code below as a bonus 🙂

Promo Code: SRPTH8LK3

$10 bonus for the first deposit of $500 (or more)!

$50 bonus for the first deposit of $10,000 (or more)!

$100 bonus for the first deposit to $20,000 (or more)!

Note: Bonus is applicable on the first deposit made only. The bonus will be automatically credited to your portfolio and invested along with your existing investments

I use StocksCafe to keep track of all my investments (include Robo) + research on stocks. You can also view my portfolio as well as many others so you can compare your own performance with other investors. If you are interested in signing up, you can use my referral link to sign up and access premium features for 1 extra month for new users. (3 months)

Let me know which option sounds the most intriguing and if you were to start investing today/again, which option would you choose? Leave your comments below and let’s have a discussion!

*Disclaimer: As with all investments, it comes with risks and capital are not guranteed. Past performance is not a gurantee of future returns and this is not finanical advise. Please do your own due diligience when it comes to any form of investments and the above content are for educational purposes only. Returns are taken from historical data and does not reflect future performance.