"America's investors have been ripped off as massively as a bank being held up by a guy with a gun and a mask," former Securities and Exchange Commission Chairman Arthur Levitt warned in an article in Fortune magazine a decade ago. That same year, in his classic book "Take on the Street," Levitt lambasted the fund industry as "a culture that thrives on hype (and) withholds important information" and asserted that the industry "misleads investors."
Today, it's worse.
Lazy Portfolios were born as a defensive move against this relentless war by guys ripping off America's 95 million Main Street investors. And the strategies of men like Levitt,Vanguard's Jack Bogle, Nobel economist Daniel Kahneman, Warren Buffett, Yale's Robert Shiller and other industry giants were the inspiration.
Lazy Portfolios give investors a far superior alternative to gambling their retirement savings at Wall's Street's casino. Simple solutions: Just three to 11 no-load, low-cost index funds and zero trading. And in the past decade we've discovered eight great Lazy Portfolios that investors are using as guides to building their own portfolios, without brokers or advisers.
Wall Street, the fund industry and brokers hate these eight Lazy Portfolios. Not just because they consistently beat the Standard & Poor's 500 Index ($INX) on a long-term basis. Not because they're based on the exact same Nobel Prize-winning model Wall Street's top wealth managers use. Not because you don't need any fancy algorithms to rebalance your portfolio. And not because Bogle calls industry insiders casino "croupiers" because they skim a third of your market returns off the top, leaving you leftover crumbs.
The more you trade at Wall Street's casino, the richer your broker gets.
Listen closely: The No. 1 reason Wall Street, fund insiders and your stock broker hate our Lazy Portfolios strategy is simple: They don't make money unless you buy, sell and trade. No commissions. No fees. They can't get rich, or richer, unless you're playing at their rigged casino, where the house always wins.
Since my days at Morgan Stanley it's been obvious that Wall Street gets rich on "the action," on all the hot trading occurring in its casinos. More commissions and fees means it can skim off more of America's retirement money.
Want hard evidence? In the decade ending in 2010, Wall Street's stock market lost an inflation-adjusted 20% of America's retirement money. Your money. So yes, Wall Street brokers and other insiders hate Lazy Portfolios. They want business as usual.
Several years ago, I started tracking the best portfolios in America: Simple portfolios used by Nobel Prize winners, multimillionaires, conservative institutional fund managers, neuro-economists and average Main Street investors.
We also found solid examples in popular books and publications like "The Coffeehouse Investor," "Motley Fool Investment Guide," "Investing for Dummies," "The Idiot's Guide to Investing," "The Gone Fishin' Portfolio," even "Dilbert and the Way of the Weasel." All winners.
Early on we discovered something amazing and brilliant. All these winners were saying the exact same thing: All you need is a simple, well-diversified portfolio of three to 11 low-cost, no-load index funds to create a long-term portfolio that wins in bear and bull markets. And you do it with no market timing, no trading, no commissions. Lazy Portfolios are that simple.
What about the thousands of other stocks, bonds and mutual funds being hustled by brokers? Forget them!
But don't you need an adviser? No. As personal finance guru Jane Bryant Quinn put it in her classic "Making the Most of Your Money," "Most of us don't need professional planners."
We don't even need a full-scale plan. Conservative money management isn't hard. To be your own guru, you need only a list of objectives, a few simple financial products, realistic investment expectations, a time frame that gives your investments time to work out and a well-tempered humbug detector to keep you from falling for rascally sales pitches.
Don't put off decisions for fear you're not making the best choice in every circumstance. Often, there isn't a "best" choice. Any one of several will work.
Use your judgment. Forget your broker and adviser. Trust yourself. Customize a portfolio that fits your needs, your age and your lifestyle. You can do it yourself. This strategy is being used successfully by working boomers and millionaires, young families with modest savings, college students just starting out, even grade-school kids.
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well, you are all grown-ups so make your own decisions, but this article is basically hogwash. wall street LOVES investors who buy and hold because most of them panic and end up selling low, waiting and buying back in at the highs, and then the market crashes again and they sell low when it appears the world is coming to an end (like 2008).
