Admit it. 2025 was a year that made Stanley Kubrick’s “Dr. Strangelove” look like a calm documentary. Stranger than fiction.
Angst galore.
An abundance of upheaval.
Universal uncertainty.
Yet, despite all that, my favorite lazy investors have done well.
Indeed, if you are a retired Couch Potato investor, you have more money than ever. Better still, you got to make a withdrawal each year. And it rose with inflation.
Long live sloth!
I learned this while doing the research for my annual “Pudding Report.” That’s an exercise I do that ignores investor stuff like return on investment percentages. It avoids any number that suggests algebra or calculation.
Instead, we stick to basics. How much did our account have at the beginning? How much did it have at the end? Did it provide inflation-adjusted spending cash?
The answer, whether we are looking back 35 years or only one year, is that we had more money. And we enjoyed a reasonable income with no loss of purchasing power.
How is this miracle achieved?
Not by engaging the proud and expensive folks on Wall Street.
We use simplicity and the lowest possible costs. We use what might be called fastidious inattention. To be exact, a Couch Potato investor divides whatever investment money he or she has into two piles.
If you are awkward with arithmetic, a calculator is allowed.
One pile is invested in an index that replicates the total domestic stock market. The other pile is invested in an index that replicates the total domestic bond market. These days, you can do that with exchange-traded funds (ETFs) that cost .03 percent of your investment a year – next to nothing.
And you can do it at virtually any investment firm. Using well established funds. With Vanguard ETFs, for instance, you would invest in Vanguard Total Stock Market Index Fund ETF shares (ticker: VTI) and Vanguard Total Bond Market ETF (ticker: BND).
Here are the results.
Note that every balance figure is greater than $100,000. Last year, the end balance for the year 2000, a 25-year period, was a worrisome $72,819. The end balance for 2022, a three-year period, was $94,613. These were low enough to cause worry about running out of money. There was endless talk that traditional balanced portfolio investing was dead.
But it wasn’t.
This year, every investing balance exceeds the starting balance.
Could you have done better by reading and guessing the future of different stocks, bonds, mutual funds or exchange-traded funds? Highly unlikely.
Could you have done better by hiring a money manager? Again, decades of studies have shown this to be unlikely because managers charge more than their best guesses will return. Worse, the longer you invest, the better the odds that simplicity will beat a large majority of managers.
Does this mean we can continue investing this way forever?
Maybe not. Another set of figures that I ran showed a change. For the first time. We can still be Couch Potato investors. Do we need to add another building block?
Next week: Tell me. Is America, and the world, in a sea change?
Related columns:
Scott Burns, “The Pudding Report, 2024: Simplicity Is Freedom, 3/23/2025: https://scottburns.com/the-pudding-report-2024-simplicity-is-freedom/
Scott Burns, “The Pudding Report, 2022: 1/29/2023: https://scottburns.com/the-pudding-report-2022/
Scott Burns, “The Pudding Report, 2021: How Much Is That in Dollars?” 2/13/2022: https://scottburns.com/the-pudding-report-2021-how-much-is-that-in-dollars/
Scott Burns, “The Pudding Report, 2020,” 1/30/2020 https://scottburns.com/the-pudding-report-2020-the-proof-is-in-the-pudding/
Scott Burns, “Show me the money!” 12/05/2020 https://scottburns.com/show-me-the-money/
Scott Burns, “It’s 2020. Are You Broke Yet? Not Hardly,” 4/11/2020 https://scottburns.com/its-2020-are-you-broke-yet-not-hardly/
Scott Burns, “The Longevity of the Couch Potato Portfolio,” 2/9/2019 https://scottburns.com/the-longevity-of-the-couch-potato-portfolio/
Scott Burns, “Living (Well) with the Couch Potato Portfolio, 7/15/2018 https://scottburns.com/living-well-with-the-basic-couch-potato/
Couch Potato Investing:
Scott Burns, “The Simplicity Manifesto,” 3/31/2019 https://scottburns.com/the-simplicity-manifesto/
Scott Burns, “On the Importance of Being a Dull Investor,”9/29/1991 https://scottburns.com/on-the-importance-of-being-a-dull-investor/
Scott Burns, “SPIVA: The Investment News that’s No Longer News,” 6/19/2022: https://scottburns.com/index-funds-beat-managed-funds-again-and-again/
Sources and References:
Vanguard: VTI: https://investor.vanguard.com/investment-products/etfs/profile/vti
Vanguard: BND: https://investor.vanguard.com/investment-products/etfs/profile/bnd
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This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, Spring 2025, at home in Johnson City
(c) Scott Burns, 2026