Buzz
'Set and forget' investing isn't flashy, but its success is undeniable. In fact, a study from Fidelity revealed that the highest performing investors were those who either forgot about their portfolios or, even more surprising, those who had passed away.
Fidelity conducted an internal review of account performance between 2003 and 2013 to identify the best-performing accounts. As Living Rich Cheaply beautifully put it (emphasis ours):
The results were staggering: the top-performing accounts belonged to investors who were no longer alive! The second-best were those who had forgotten about their accounts at Fidelity.
This internal study made waves when asset manager James O’Shaughnessy shared it on Bloomberg radio. However, it’s far from the first study proving that lazy investing works. Over time, the slow-and-steady approach seems to consistently win. While active investors argue that market timing can yield big profits, data suggests otherwise. For beginners, 'set and forget' investing is often the easiest and safest strategy.
MarketWatch raises a valid point, but this doesn’t mean you should ignore your portfolio completely. It’s important to check in from time to time and rebalance as you approach retirement. However, it's a reminder to resist the temptation to buy high and sell low, especially when the market takes a downturn. In short, reviewing your portfolio periodically is wise, but for the most part, leaving your investments alone will often serve you best. For more details, check out the links below.
Photo by Steven Depolo
