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3 Ways to Succeed as a Lazy Investor

By Maurie Backman - Mar 6, 2021 at 5:36AM

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Here's how to do well in the stock market -- even if you're taking a hands-off approach.

Some people enjoy following the stock market religiously, tracking its daily or weekly ups and downs. But what if you fall into the opposite camp? What if you're on board with the idea of investing but aren't particularly interested in stock market happenings, and don't really want to sink a lot of time into building a portfolio?

Some of us are just lazy investors by nature, and there's nothing wrong with that. But if that's the case, here are some tips to help you succeed without putting in a lot of effort.

Man at desk with eyes closed

Image source: Getty Images.

1. Load up on index funds

Buying individual stocks takes a lot of research. You'll need to dig into different companies, see what sets them apart from their competition, figure out how well they manage their cash flow and debt, and track their performance over time. If you don't have the patience for that, look at index funds instead.

Index funds are passively managed funds that aim to match the performance of the market indexes they're tied to. When you invest in index funds, you get to own a bucket of stocks with a single purchase. That leads to a nice diverse portfolio without having to do a lot of work.

The downside of index funds is that you won't beat the market -- rather, you'll simply benefit when it does well and see your portfolio value decline when volatility rears its ugly head. But having a portfolio that moves with the broad market isn't a bad thing -- especially since it still opens the door to long-term gains.

2. Use dollar-cost averaging to your advantage

With dollar-cost averaging, you commit to investing a certain amount of money at preset intervals over time. You might, for example, invest $300 every other Tuesday in an S&P 500 index fund and see where that leads you. The great thing about this strategy is that it takes guesswork out of the equation, so if you're not up for timing the market (which seasoned, hands-on investors fail at all the time, anyway), you don't have to -- you simply stick to your pre-arranged schedule.

3. Be in it for the long haul

The stock market can be extremely volatile, which means your portfolio value can fluctuate a lot from week to week or month to month. But that's not something you'll have to worry about if your goal is to load up on quality investments and leave them alone for years. Not only is a "buy-and-hold" strategy effective for growing wealth, but it's also ideal for investors who don't want to spend the time to constantly reassess their strategy.

You don't need to be a hands-on investor to do well in the stock market. If you're not up to the task of tracking the market's performance and assembling a collection of individual stocks, take the easy way out. If you stick to these rules, there's a good chance you'll end up doing quite well for yourself in the long run.

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