By John Wasik
(Reuters) – I’ve never thought that laziness could be a virtue, but when it comes to investing, it’s often advantageous. You can trade too much and become too pre-occupied with the headlines and business TV shows. It can drive you crazy and you’ll lose lots of money making bad decisions.
Or you can set up a lazy Nano portfolio, which I proposed years ago – and forget about it. Based on my initial plan at MyPlanIQ (link.reuters.com/qus26s), a web-based application to help manage retirement accounts, my hypothetical Nano portfolio returned 7.4 percent in their tactical asset allocation model in 2011.
In contrast, the S&P 500 posted a tiny loss for the year.
I paid so little attention to my Nano last year that I only knew what it returned when MyPlanIQ sent me its independent year-end tally last week. I have no relationship with the site, nor did I ever ask them to monitor the portfolio. They calculated the returns and tweaked the allocations using their own tactical asset algorithm to get better results with fewer funds. While I hold some of the funds in my family’s portfolio, I don’t manage other people’s money. I’m skittish enough managing my own.
I called it Nano because it’s small in composition – only five exchange-traded/mutual funds – and modest in its aspirations. It was my humble contribution to the world of investing – a free exercise in benign neglect and diversification.
Here’s how lazy I am: I don’t try to predict the market, world events, Federal Reserve movements or the next hot sector. In fact, I make no predictions at all – including how my portfolio will perform this year. I have no special skill. My Nano set-up is a middle-of-the road core growth portfolio for someone in their accumulation phase with at least 15 years to go until retirement.