How to be a lazy investor

Most of us don’t have loads of time to dedicate to investing or might feel overwhelmed to get started because it can feel like you need lots of spare time to do it. But fear not, lazy investing is a perfectly plausible – and very effective – way of investing if you’re short on time.

While many enjoy dedicating time to investing like a hobby, the majority just don’t have spare hours in their life (or perhaps the interest) to track markets, fiddle with their portfolio or read company reports. While you shouldn’t be entirely hands-off with your investments, you can put some clever things in place to make it very light-touch.

Here’s your ultimate guide to lazy investing.

Set up regular investing

By automating your investments, you don’t have to think about paying money into your account or manually investing that money each time. Instead, you can set up a direct debit so that money automatically goes from your bank account into your investment account each month. Then, set up a regular investment so that the cash is automatically invested in the funds or shares of your choice each month. It means that you money will be invested each month without you having to lift a finger. Regular investing has lots of other perks too – so being lazy is actually paying off here!

Outsource your investing

Some people enjoy building their own portfolio of investments, picking stocks and researching different options. But for the time-poor that’s not a great choice, as you have to invest a lot of time into that research and then monitor those stocks to make sure they are performing as you’d expect.

But one way around this is to select a multi-asset fund where the fund manager does all the hard work for you. These funds, often called all-in-one funds, intend to spread the money across different asset classes to give you a diversified portfolio of investments. You can select the one that’s suited to your needs, with some having a higher allocation to stock markets, rather than cash and bonds, meaning it will have higher risk but may generate higher returns over the long term.

On the other hand, you could opt for a lower risk or more cautious option, which has a higher amount invested in cash and bonds and less in stock markets – which might suit those who have a shorter investment period or who want to take less risk.

You’ll still need to keep an eye on these funds to make sure they are performing as you’d expect and that the fund manager isn’t deviating from their remit, but it’s far less time intensive than individual stock selection.

You could also achieve this by investing in a broad global stock market tracker that mimics the performance of an index of global companies. However, this won’t give you an allocation to different asset classes, so you’ll need to handle that part yourself.

Don’t check your account too often

It’s very tempting to keep refreshing on your investment account to check how it’s doing – particularly when markets are falling or in turmoil. But it’s best to avoid checking your account too often. You’ll want to keep an eye on it and check every few months – or at least once a year. But if you check it daily, you’re far more likely to tinker with your portfolio or react emotionally to market drops, which could harm your portfolio in the long-term.

Pick a tax-efficient account

Picking an ISA or pension account for your investments means your money is protected from tax, whereas in a general investment account you may have to pay tax. There are two benefits of making sure that the taxman doesn’t get his hands on your investments. The first is that you keep more of your investment gains for yourself, rather than handing over a chunk of it for capital gains tax or dividend tax. The second is that you could save time having to work out your tax position and fill in a tax return to declare it. Something that saves both time and money feels like a double win!

In order to pick the right tax-efficient account, you’ll have to work out what you’re investing for, how much you’re investing and how easily you want to access your money. Get more help on picking the right account.