It’s 6.29 am on a Monday, I’m awake and I know – I know – that in exactly one minute a flood of bird noise is going to shatter the silence in my bedroom. How do I know this? Because my alarm is set to go off at 6.30 am every morning Monday to Friday, and it does so without fail.
For some reason, when I was a kid, my mum had this big old-fashioned alarm clock that you had to twist each night for the number of hours you wanted to sleep for. Which, now I think back on it, feels like a whole lot of unnecessary maths late at night.
But here’s the thing – her alarm and my alarm do exactly what we want them to, which is wake us up. Her alarm required an active and engaged approach, whereas mine is a simple set and forget.
Now, is 'set and forget' lazy? Yes, it probably is. But is there any difference in results? For an alarm, no. But there are some cases where taking the lazy approach could have different results in the long run - in your Stocks & Shares ISA for example.
The value of 'set and forget'
Obviously, the biggest benefit to a set and forget approach is that it only really requires your attention once. You can do all the research, figure out what it is you need, find the perfect solution or best investment provider – and then let it do its thing. This could apply to many different products, and it helps to save you time and hassle on a daily, weekly, monthly, or even yearly basis.
Is it lazy? Not really, but it doesn’t take much – if any – effort to do, so we can call it a lazy approach and (hopefully) not offend anyone!
Stay the course
But there are other perks as well, especially when it comes to investing. Buy and hold is a very common strategy in investing, with the idea that over time your investments rise in value. Set and forget – or lazy investing – could benefit you here as you’ll just sit back while it does its thing. If you were to be more active and regularly checked in, then you might worry if the price drops or if the market falls and sell at a loss.
If you’re not checking in every day, or you’re just happy to let things run, then it could work out better for you – especially in the long run. For example, anyone who invested in the FTSE-100 (which holds the UK’s 100 largest listed companies) for any 10-year stint between 1986 and 2021 had an 89% chance of making a gain.[1] So, just by being lazy and leaving it alone, you could put your long-term chances of making a gain pretty high.
Pay less in transaction fees
When you invest, there’s typically a few costs you have to pay – and one of these is transaction costs. These can range from fractions of pennies through to thousands of pounds. One really easy to understand example of this is estate agent fees. If you’re a property investor, you need to pay an estate agent a cut every time you sell a property. Now, if you decided to sell each time your property value went up you would end up paying huge fees to the estate agents which would eat into your profits. If these fees are frequent and big enough, it could even make your investments unprofitable.
The same is true of all types of investing – unless you’re a day trader where it’s part and parcel – by selling and buying less, you pay fewer fees and therefore have less of your profits being eaten into.
Reduce your stress and remove emotion
It can be very easy to get tied up in your investment’s performance, but if you use a lazy approach, you’ll check your performance less and therefore reduce the amount of stress and emotion felt about it. While this obviously isn’t true for everyone, it can help you to make much more sensible decisions – or even no decision, the laziest decision of all, which could be the right one for your circumstances, you never know!
Of course, you could take a mixed approach to this by using a set and ‘sort of’ forget, where you check in on your performance every so often. We’ve run the numbers in this blog if you’re not sure about how frequently you should be looking at your account.
Track the market
If you want to be exceptionally lazy with your investing, but still hope to reap the rewards, you could simply track the market. You can do this with funds – which are a collection of individual investments – that are designed to mirror the markets’ performance. For example, you could track the top 100 companies in the UK by investing in a fund that tracks the FTSE100.
Doing this will mean that if the market does well, so will your investments, but if it falls your investments will too. Now, as you’re being lazy, you could just let it do its thing, taking a long term approach and not worrying about the short-term rise and falls. Or there is another option…
Give it to someone else
Want to be really lazy with your investing and still have heaps of potential? Robo-investing lets you do exactly that. At Wealthify, all you need to do is tell us how much money you want to invest, how much risk you’d like to take, and whether or not you want ethical investments. You can also choose to invest in a Stocks and Shares ISA, a General Investment Account, a Junior ISA, or even a SIPP – aka a personal pension). We’ll do absolutely everything else.
You can check in whenever you want, or you could just leave it to do its thing. Our experts will look after your money, making changes when we need to to keep your Plan on track. You could set up a Direct Debit and keep the money rolling in or just add to it whenever you feel like it. There’s no pressure, no minimum investment amounts, and we’ll just do our thing while you do whatever you want.
- Data from Bloomberg
Please remember that past performance is not a reliable indicator of your future results.
With investing, your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.
Wealthify does not provide financial advice. Seek financial advice if you are unsure about investing.
