Lazy Investors Finish First

Posted on the 26 November 2021 by Smallivy

Want to do better at investing? Get lazy!

You don’t want to be a lazy worker since you’ll never see your income rise and you’ll be the first person laid off if you aren’t fired outright.  You don’t want to be a lazy spouse since it will hurt your marriage.  You don’t even want to be lazy when it comes to managing your money since you’ll waste all sorts of money buying stuff you won’t remember in a week.  One place where it is good to be lazy, however, is in investing.

Hey – if you like The Small Investor, help keep it going.  Buy a copy of SmallIvy Book of Investing: Book1: Investing to Grow Wealthy, buy one of the products shown, or just click on one of the product links and then browse and buy something else you need from Amazon’s huge collection.  The Small Investor will make a small commission each time you buy a product through one of our links.

Note, if you click on a link in this post and buy something from Amazon (even if you buy something different from where the link takes you), The Small Investor will receive a small commission from your purchase.  This costs you nothing extra and is the way that we at The Small Investor are repaid for our hard work, bringing you this great content.  It is a win-win for both of us since it keeps great advice coming to you (for free) and helps put food on the table for us.  If you don’t want to buy something from Amazon or buy a book, how about at least telling your friends and family about our website as a great place to learn about investing and personal finance.  Thanks!)

Lazy investors don’t do anything very often.  They think about calling in an order to sell a stock that has gone way up in price, but then it is a week or two before they get around to it, so they only trade a couple of times per year.  They don’t feel like pouring through stock tables, so they pick a couple of mutual funds that cover the markets and just stick to them.  They use payroll deduction since they’re too lazy to send in a check each month.  They maybe check their account balance once a year, so they may actually miss a whole market crash and recovery (what great recession?).

Active investors are suckers

Why does it pay to be lazy when it comes to investing?  It is because active traders do things that cause them to be bad investors.  They see the markets going up, so they put more money in just before it peaks and crashes.  They get scared in market crashes and sell just as stocks are hitting the bottom and starting to rally.  They go through their 401k account and shift out of the funds that have done poorly and into those that have done the best, buying those funds when they are high in price and selling the ones that are low in price right before they start to rally.  The next year they do exactly the same thing, trading back to the funds they owned before.  They watch CNBC and buy or sell stocks because some analysts tells them to, buying or selling with everyone else who saw that program and therefore getting a really bad price.


In the end, active investors spend a lot in fees and make a lot of money for their brokers, and maybe get banned from trading by their mutual fund company, but they lag the returns of the markets.  They also create a lot of paperwork when they do their taxes since they need to account for each trade. So they do more work but get less done. Their brokers love them. The tax man loves them. The other people in the mutual fund hate them. Don’t be an active investor. Be lazy!

Want all the details on using Investing to grow financially Independent?  Try The SmallIvy Book of Investing.  

Why you should be lazy

Be lazy and you’ll make all the right moves.  You’ll just own everything, instead of trying to choose, so you’ll always have your money in the stocks that are doing well at any given time.  You’ll rarely sell, so you won’t sell in a panic.  You won’t generate costs and tax paperwork by doing a lot of trades.  You won’t be stressed at night about what the stock market did that day because you’ll not even look at the markets.  Being lazy is great for an investor!

We have four cats at The Small Investor. We’ve switched to PrettyLitter from our old, clumping clay cat litter. We don’t want to carry those heavy bags of clumping litter and add more all of the time. With Pretty Litter, you just scoop out number two as needed and change it once per month. The urine is absorbed by the littler. It even changes colors to indicate if your feline friend has a problem?

PrettyLitter is dust-free, advanced odor control, health-monitoring cat litter. This color changing crystal litter helps to detect your cat’s health issues early. Its highly absorbent silica gel crystals absorb moisture and trap odor.

If you want to become a lazy investor and make more money, here’s a few tips:

1. Be lazy when selecting investments.  Instead of spending hours researching stocks, buy mutual funds.  And instead of spending hours pouring over mutual fund evaluations and reports, just buy the basics – an S&P500 fund, a Small Cap Fund, a Total Bond Market Fund, and a Total World International Index Fund.  Don’t have the money to buy all of these at once?  Just buy the Small Cap fund now, then add the others when you think of it later, maybe in a year or two.

2. Be lazy in your fund allocations.  Instead of trying to figure out which funds to buy based on what the talking heads are saying is going to be hot next year, just invest 25% in each fund.  Whenever you have money to invest, find the fund that is the lowest percentage of your portfolio and buy that one.

3. Be lazy when selling.  With mutual funds, unless you need the money within five years, don’t sell at all.  Just let your money ride.  If the market goes down, don’t sell.  If the market goes up, don’t sell.  Just lock it and leave it.  If you own any individual stocks, don’t sell them unless one becomes worth more than $50,000 or ten percent of your account, whichever is bigger.  If that happens, sell half, but not too quickly.  Otherwise, give time for the company to grow.

4.  Be lazy when sending in money.  Put your investments on auto-pay so that you don’t need to remember to send in money.  Just have it magically leave your checking account once or twice a month and go into your mutual funds.

5.  Be lazy when reading your statements.  Maybe open a statement once a year when you have nothing better to do, and then to mainly check and see if you’re getting hit with any fees.  So long as things are chugging along, don’t make any changes.

So there you have it.  Be active when it comes to exercise.  Be active when it comes to budgeting.  Be active at work and active with your kids.  But be lazy about investing, and you’ll do better than 90% of the other investors out there.

Have a burning investing question you’d like answered?  Please send to smallivy@smallivy.com or leave it in a comment.

Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.