Couch Potato ETF Portfolio: Probably Better Than Constant Tinkering

Scott Burns is one of America's top financial columnists and nationally syndicated with the Dallas Morning News. Last year he co-authored the best-selling Coming Generational Storm, the definitive work on the impact of the multi-trillion dollar Social Security and Medicare deficits. And Burns also happens to be the creator of the Couch Potato Portfolio.

Burns has been tracking the Couch Potato Portfolio since 1991. This portfolio is so simple it's shamelessly embarrassing. Just two funds each with a 50/50 asset allocation: S&P 500 Index (SPY or IVV) and Broad Bond Fund Index (AGG). And for the more aggressive couch-bound investor, Burns offers the Sophisticated Couch Potato Portfolio which uses the same two funds, but with a 75/25 asset allocation.

The name Couch Potato Portfolio comes from Scott's amusing rebalancing strategy. It takes maybe 10 minutes, forcing you to get you up off the couch and away from the tube.

Here's how Burns describes it: “Once a year — like when you add new money — you take the total value of your investments and divide by two. That tells you how much you need in stocks and in bonds. So you move some money, as necessary, from stocks to bonds. Or vice versa.” So simple you could do that math with a hangover.