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Set It and Forget It? Not with Your Portfolio!

Aaron Levitt Dec 14, 2017


It’s no secret that indexing has caught on like wildfire.

Many investors have embraced low-cost index mutual funds and exchange-traded funds (ETFs) as the building blocks of their portfolios. And there are plenty of reasons why index funds are great. At bare minimum, their lower fees tend to have them outperforming active management over the long term. But our love of indexing does have a slight problem.

We’ve become quite lazy when it comes to our portfolios.

Thanks to their ease of use and broad nature, rebalancing has gone out the windows as we’ve adopted a “set it and forget it” mentality. That’s not good for anybody. But it’s especially bad in the current environment after such a huge run-up. For investors, it’s important – even if you’re an indexer – to monitor just what’s going on with your investments.

Use the Dividend Screener to screen recession-proof stocks by applying more than 25 parameters. You can download all the results in a CSV and do your own custom analysis.

Letting It Run Too Long

Over the long haul, indexing remains one of the best things you can do for your portfolio. And much of that comes from its diversification benefit. After all, you can buy a fund like the Vanguard Total International Stock ETF (VXUS) and get access to thousands of stocks with one ticker. The problem is that diversification and ease can make us lazy with our portfolios. It’s very easy to say: “Well, I own the VXUS. That covers all the entire international markets and that’s the end of that.” We buy the fund and essentially walk away. Why would we ever need to look at it again? We now own the market.

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