Published Sun, 26 Feb 2017 14:56:34 -0500 on Seeking Alpha
Many of you know of Scott Burns. He published his first book on personal finance in 1972. His financial column, begun at the Boston Herald and later the Dallas Morning News, was syndicated beginning in 1981. He retired in 2017.
In 2006, Burns doubled up to become one of the founders of AssetBuilder as well as its Chief Investment Strategist. AssetBuilder is a money management firm that emphasizes asset allocation using DFA funds. They illustrate a variety of fund recipes for different goals and levels of risk (volatility) tolerance.
In 1991, Burns proposed what became known as the Couch Potato portfolio. It was a 50-50 portfolio in U.S. stocks and U.S. bonds using mutual funds.
The Couch Potato idea has since grown a little more involved, but the underlying principles remain the same for most "lazy investor" portfolios:
Simple Cheap Effective For example, here is one of AssetBuilder's portfolios. You can see how it mixes 6 asset classes, using funds, to create an overall investment portfolio:
If you move clockwise around the portfolio, you can see an order of adding assets that is typical of many lazy portfolios:
Fixed income (our dividend growth portfolios will have 0 allocation here) U.S. Large-cap stocks U.S. Small-cap stocks REITs International stocks Emerging market stocks My purpose in this article is to outline a framework for designing and building dividend growth portfolios for couch potatoes.
Please note that these are not... Read more