The Best Investors Literally Forget About Their Portfolios
Set-and-forget investing is not attractive, but it works. In fact, lazy investing is so effective, Fidelity research has shown that the most successful investors have either forgotten their accounts or, even more insanely, they are dead.
Fidelity reportedly conducted an internal study – a review of the performance of the accounts from 2003 to 2013 to determine which ones performed best. I like the way Living Rich Cheaply explained it (emphasis added):
They found that the most efficient accounts were from DEAD investors! In second place were investors who FORGOT to have accounts with Fidelity.
This was an internal study that became popular when asset manager James O’Shaughnessy aired it on Bloomberg radio. However, this is certainly not the first study to show that lazy portfolios work. Over time, when it comes to investing, it seems like the slow and steady movement is winning the race. While active investors tell you that you can time the market and make money by playing stocks, the data seems to suggest otherwise, and investing is the easiest and safest option for novice investors anyway.
MarketWatch rightly notes, though, that doesn’t mean you shouldn’t check your portfolio from time to time and rebalance it as you approach retirement. However, this is a good reminder to avoid high-buying and low-selling, which is easy to do when you see the market plummet. In other words, check your portfolio from time to time, but for the most part, forgetting about your investments is the best thing you can do for them. For more information, follow the links below.
Fidelity Checked Which Investors Did Better and What They Found Was Hilarious | Business Insider via Live Rich Cheap