For more than a decade, MoneySense has encouraged its readers to use an approach to investing that sounds so uncomplicated anyone can do it. Its name—the Couch Potato—suggests laziness, even sloth. You simply build a diversified portfolio of index funds, check in on it once a year, and otherwise let your money thrive on benign neglect. Thousands of Canadians have found success and peace of mind with this method.
Over the years, however, we’ve come to appreciate that the Couch Potato strategy isn’t always so easy to execute. That’s why we asked our index investing expert Dan Bortolotti to write the MoneySense Guide to the Perfect Portfolio. This new guide will help you navigate the process step by step, even if you’ve never invested on your own before.
Our guide starts by showing you how to set financial goals and determine how much risk you need to take to reach them. After that, it describes how to design a simple, low-cost, diversified portfolio that’s suited to your objectives. Then it takes you through the maze of investment funds and shows you how to pick the right ones. It explains how to open an account with a discount brokerage so you can build and maintain your portfolio on your own. Finally, it shares some wisdom about the most difficult part of investing: sticking to your plan when the media, market gurus, your brother-in-law and your own self-doubt are threatening to sabotage all your hard work. Along the way, we include personal stories from real Canadians who have succeeded with index funds, offering tips on what to do—and what to avoid.
The Couch Potato strategy, also called index investing or passive investing, is not new. Some of the world’s most respected financial thinkers—several of whom have Nobel Prizes on their mantels—have been recommending it for decades. If you’re not happy with the returns you are getting now with mutual funds or stocks, consider giving it a try. For $9.95—the cost of a single online trade—you can read about how to reduce your investing costs, lower your risk, boost your returns and build your wealth faster. You can order the MoneySense Guide to the Perfect Portfolio online here or pick it up today at top retailers, including Chapters, Indigo, Shopper’s Drug Mart, Walmart and Loblaws.