The stock market has ups and the stock market has downs. We all know this. In our heads, many of us think that we can stomach a down market but when the market suffers a big decline and we see the massive negative number on our statement, it might be tempting to make a rash decision to sell and put money someplace safe. Then, we wait until the market is soaring and move our money from the safe spot to the high growth areas. In other words, we sold low and bought high. Not good.
Getting lazy, better known as target date investing, might be a solid solution for you. In target date funds, the account is regularly rebalanced and is invested in a manner that is appropriate for someone with your investment time horizon. In other words, it starts out more aggressive and as you get older and closer to retirement, the account gets more conservative.
As with any investment, it is still important to do your due diligence. You should regularly compare the fund to its peers and review the fund to make sure there are no fundamental changes to its investing philosophy, but this is still a lot less work than monitoring your portfolio on a weekly or monthly basis. With all the time you save, you should probably take a nap.
