CHICAGO (Reuters) – I have always found that laziness is a virtue when it comes to managing my own money. The less I trade, the better my performance.
Years ago, in an attempt to come up with a hypothetical portfolio that provided low-cost diversification, I created what I called a “Nano” – small and compact – portfolio as a investment strategy intended to capture returns from the U.S. and global stock, bond and real estate markets. Lazy portfolios are generally passive and rebalanced once a year. The idea is to set the allocations and leave them alone – not try to time the market.
Thanks to MyPlanIQ.com, a useful website that creates and monitors portfolios (I have no connection to it), I have been able to track the performance of my virtual Nano holdings over time. My set-up has done reasonably well, but as with all portfolios, results depend on the period being looked at and on performance relative to the market as a whole.
To see my portfolio on MyPlanIQ, click on link.reuters.com/guv27t
MyPlanIQ updates me once a year on how the portfolio has done relative to other lazy portfolios that it tracks. This year, I was pleasantly surprised to see that my three-year average return through March 29 is in third place behind a portfolio put together by William Bernstein, an investment adviser, neurologist and author of such books as “The Four Pillars of Investing,” and one by David Swensen, the manager of Yale University’s endowment. Since I admire both men, esteemed professional money managers, I’m humbled to be in their company.
My Nano portfolio returned 9.7 percent annually in the three-year period. That compares with 12.1 percent for Bernstein’s “No Brainer Four Fund Portfolio” and 11.3 percent for Swensen’s “Yale Individual Investor Portfolio.”