Couch Potatoes Crush Hedge Funds

 Ever been jealous of the extremely wealthy people who qualify to invest in hedge funds? 

Don’t be.  The joke is entirely on them.  They might have bigger bank accounts than you, but they’re generally taken for fools when they invest in the hedge fund industry. 

Let me show you how to thrash them in the investment game:

Read my latest AssetBuilder article





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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7 Responses

  1. Nicolas says:

    Hi Andrew

    Great article, and great book. I keep recommending it to friends, and they love it.

    I see that your Couch Potato Portfolio invests in Vanguard Inflation-Protected Securities Fund (VIPSX).

    In my own portfolio, the bonds portion is invested in the seemingly less exciting Vanguard Short-Term Bond (BSV).

    Would you recommend VIPSX over BSV?

    I'm 35 and investing for the long term (20-30 years).

    Thanks!

    Nicolas

    Los Angeles, CA

    • Thanks for the kind words about the book Nicolas!

      As for your bond selection, I think it will work just as well. It's a great idea to buy short term bond indexes. It will ensure that inflation doesn't eat you if it rises. Keep what you have. Your portfolio is going to crush the returns of most hedge fund investors also! In fact, it already has.

      • Nicolas says:

        Thanks for the reply Andrew. I'll keep what I have.

        On another note, I tried to contact you through the email form on your website but I don't know if you received my message.

        I'm the US correspondent for Montreal's La Presse newspaper and would love to write a piece about you, your unusual story and your book for our business section. If you have a minute I'm at nicolas.losangeles (at) gmail.com. Thanks! N.

  2. Simon says:

    Hi Andrew,

    1. When is the best time of the year to do rebalance of your Couch Potato Portfolio ?

    2. I am looking for an average 6% annual return but frankly it is not ready interesting..sorry I know it is already better than FD and CPF returns.

    3. I understand u do not promote leveraging (option/CFD) and insurance. Any good advice ? Property investment ? Hope u can share some more good advice.

    4. Looking forward for your next book if you are doing one.

    Best of luck !

    Simon

    PS : I am 40+ Singaporean, just divorced and does not own any property. I am starting all over again and your book has been an inspiration. Like many Singaporean, we are not able to save much and could only dream of becoming rich via TOTO and 4D. I blame myself for my failure to save and invest properly when young but today I am not giving up, thanks to you !

    • Hi Simon,

      You could rebalance on your birthday or on any other date that you'll remember. There's no specific month that is better than any others. In fact, if you always buy the lagging index each month, this may end up being all the rebalancing you need. But if the markets go crazy, swinging your account in a big way, you might consider doing it as soon as it gets out of alignment by 15% or so. Property investment in the U.S. would be great if you could buy a multi-plex. There are two places I certainly would not buy property because the rental yields are awful: Singapore and Australia…and Vancouver B.C. OK, I added a third!

      Take comfort in knowing that thanks to the CPF, Singaporeans save more of their income than people in any other country, on average.

  3. Joel W says:

    Hi Andrew,

    Just finished reading “Millionaire Teacher” and I loved it!

    I have two questions in implementing this strategy in my employer’s 401k, which doesn’t offer much to choose from. The only two Index funds available (can tell right away by viewing their expense ratios :), are the S&P500 and one called “SSgA U.S. Inflation Protected Bond Index” which “Invests in a portfolio of US. Treasury inflation-protected debt securities.”

    1. Because these might be different than the short-term government and corporate bonds you recommend, I’m not sure if they’ll work. All they need to do is rise when stocks fall and vice versa. Should I go with these? They are the only bonds available to me.

    2. The only International funds available to me are a mutual fund with 0.57% expense ratio, where the S&P500 and Bond indexes are 0.02 and 0.08% respectively. Is it worth taking the expense ratio hit to get the access to international markets? Versus just having the two instead.

    Thanks!
    Joel

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