Lazy Portfolios plummet in recent downturn!

Of course all portfolios plummeted in the recent downturn if you were invested long and broadly. But the Lazy portfolios of Vanguard Index funds I have been tracking fell by much more than the actively managed comparable funds I picked through a single discount broker. They fell so much more that my portfolio is now out-performing the 'lazy portfolio' since 'purchased' on May 1st and year-to-date.

I will not tell you what to do or challenge your intelligence, unlike Paul B. Farrell, who made the claim on 7/9/7, right before the recent downturn:

It's time you got serious about setting up some "Lazy Portfolios." Why now? Because they're the only intelligent way to invest for a passive investor: Simple well-diversified portfolios of three to 11 no-load index funds. "Lazy Portfolios" are the best and safest way to capture the bull on the way up and avoid the worst of the bear on the way down." (emphasis added)

I chose my 20 funds and then picked the 20 index funds to match the categories and then picked 3 index funds to cover the Domestic, International, and Bond allocations of my groups of 20. I did this to see, what would ACTUALLY happen with real side by side comparisons. Right now, Indexing would have cost me more than my hand picked low cost options, but 3 months is not enough of a record to really make a decision on.

Still, I wonder if Mr. Farrell likes his lunch.

I anticipated that when the market took a big dive, my actively managed mutual funds would lose more than the comparable portfolio of Vanguard Index funds, but the exact opposite took place. I probably anticipated this because I have read Farrell and others claiming this would be the case.

On Thursday, WylieMoney took the lead in % change since I invested on May 1st. I keep track of WylieMoney Slowly- the portfolio I am building one fund at a time, but since it only has 3 funds so far, and one of those is a bond fund, it is no surprise it is a bit out of sync. Once It gets up to 10, I'll consider it big enough to really be counted in the competition.

The Three Fund Index was still beating the WylieMoney 20 YTD. But then, along came Friday! Yes its true that Friday pushed all the portfolios into the red since my 'purchase.' Some might think this a sad day... Well, one thing to consider is that I only 'invested 'in May so I have to expect that short term, things might be a little rough. Another thing to consider as I did not actually invest any cash.

So here is the summary for 7/27 and below are the details for each portfolio. Click on the images for larger, more legible views.


WylieMoney Slowly


Really Lazy- 3 Fund Portfolio


SPY- S&P 500

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