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June 22, 2011


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MarketWatch has a column written by Paul Farrell on what is known as "Lazy Portolios", a concept similar to the above "Gone Fishing" portolio. A Lazy Portfolio is especially helpful for investors who don't have the time/inclination to manage a portfolio, be it small or large. I've recommended it many times to young investors as a way to start out.

Farrell's page on MarketWatch is at:

I have a "Gone Fishing" or "Lazy Portfolio" that's perfect for me, but I am 76 and have already made my millions so it wouldn't be of any use to young working people.

In our IRAs I have CDs that I bought back in 2008 when I could get as much as 5.15% on an FDIC insured CD. As those CDs have matured, or in some cases when the banks failed and I got my money and accrued interest back, I bought investment grade corporate bonds in well known, highly successful companies with yields up to as much as 5.5%.

In our taxable, trust account I own a portfolio of municipal bonds laddered between 2011 and 2032, with yields ranging from 4%-6% and purchased at prices of par value or below.

Thus I have a tax optimized portfolio that yields right around 5% with no market volatility since everything is held to maturity when I receive par value, and in almost all cases a small capital gain.

The only work involved is reinvesting the income every month and reinvesting CDs or bonds that mature. What I like the most of all is that the whole nerve wracking business of winning days and losing days is a thing of the past. I just have a portfolio that goes merrily along compounding at a constant rate close to 5%/annum.

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