Simplicity can be surprisingly difficult – or at least: choosing between easy-to-implement options is itself sometimes a challenging task. If you are not quite sure where to get started on the road to lazy investing, here are some useful jumping-off points for comparing and generating passive portfolios:
1) The Couch Potato Cookbook by Asset Builder has a wonderful set of recipes based on the number of funds one might want to include in their calculations, ranging from a super simple two-fund solution to a ‘ten-speed’ variant with each increment in between. While this author does not necessarily recommend the very first option (which omits international equities for the sake of simplicity) the overall approach is admirable and it helps to see how one should (or could) prioritize different pieces incrementally.
2) The Lazy Portfolio Performance Page at Market Watch offers a chance to compare past returns between various widely-recognized passive portfolios, seeing how they work in action against a benchmark like the S&P 500 index (though a broader, more global index might be a better yardstick). Notably, thanks to bonds and international holdings, not one of the eight ones they list has underperformed the S&P in the past decade.
3) The Lazy Portfolios Example Page at Bogleheads.org presents, in graphical and text format, some of the more popular options by Boglehead-style passive-investment gurus and authors including Bill Schultheis, William Bernstein, Rick Ferri and Bill Armstrong, providing additional context for each set of portfolios along the way and emphasizing asset classes rather than funds.
4) The Lazy ETFs Portfolio Page at Oblivious Investor likewise lists a series of guru-backed portfolios including Allan Roth, Harry Markowitz, Larry Swedroe and a personal favorite: Harry Browne, whose permanent portfolio is a paradigm of balanced simplicity.
5) The Simplified Buy and Hold is a uniquely contentious portfolio widely discussed over at Bogleheads.org. This author actually holds a variant of the version proposed by Trev H on the forum, but recommends not being distracted by the impressive back-testing graphs regardless – after all, past performance does not predict future results! Why include this one-off, single-portfolio link? It illustrates that even the most simple of solutions can be widely debated – many see discussions like this and (perhaps wisely) revert back to something even simpler like a 2-or-3-fund portfolio.