Some reader questions could be embarrassing.
Do you invest your own money as you write? Are you really a Couch Potato investor?
Answer: Pretty Much.
We do it this way because it has worked rather nicely.
Burns family retirement accounts are 100 percent invested in low-cost exchange-traded funds. They have been invested that way since it was possible to do so. We also have a taxable account. We think about this account as a “legacy” account. We use it to provide some money when it helps and hope to leave whatever is left to our adult children.
That account is a bit less pure. It’s currently about 14 percent in individual stocks. They have changed in name and number over time. Combined, We’re about 93 percent Couch Potato.
That’s less pure than Ivory Snow. But still, pretty close to All-In.
I’m sure some of my reasons for imperfection will be familiar to readers who are less than 100 percent Couch Potato. I hope they give you some comfort if you’re not a Perfect Couch Potato.
History and Habit
When I started investing in my 20s, there were no index funds. Mutual funds were usually sold with commissions ranging up to 8.5 percent, plus additional management expenses that you were charged every year. Those charges were almost always more than 1 percent. Often they were more than 1.5 percent.
Individual stocks seemed a reasonable alternative, despite the commission to purchase.
Yes, this was a long time ago, the late 1960s.
I was also thrilled by the rapid climbs discussed daily on the radio and by brokerage newsletters. It took a while to realize that my broker made money on every transaction, whether I made or lost money.
Miraculously, my broker always had a great opportunity to suggest!
Wow, a new modem for fax machines that would allow them to send a full black and white page in less than five minutes! Technology! It’s so amazing. Fortunes will be made!
That was then.
Today, fax machines are quaint. But don’t worry, we’ve got AI and the new weaponry of asymmetric warfare!
Eventually I learned the statistics and probabilities of investing. They dictate low-cost index fund investing with as little activity as possible.
But it’s still exciting to have a window on how business and technology change how we live.
Waiting for the Menu To Change
While lots of research developing the statistics and probabilities of investing started to pour out of universities in the late 1960s, Wall Street was slow to change the menu. Why? They had a good thing going. Good for them. Not good for you and me.
But eventually we had money market funds (early 70’s), the first index mutual fund (mid-70’s) and, much later, the first exchange-traded funds (early 90’s).
Anyone investing during that period was limited by the menu. So I bought no-load funds with low expenses in my 401(k) account. I did the same with my taxable account (what was left of it after the market crash of 1973-‘74). When the menu offered low-cost exchange-traded funds, I went all in.
That took awhile. Vanguard launched the Total Stock Market Index ETF 25 years ago, in 2001. The Total Bond Market Index ETF wasn’t launched until April 2007. The iShares and State Street equivalent low-cost index ETFs were launched between 2000 and 2007. Only in the last 20 years has it been broadly possible to invest at nominal expense.
Avoiding New Temptations
Does this mean we now live in a perfect world of low-cost investing? We can. But Wall Street, having been successful at marketing high-cost, illiquid alternative investments such as private equity and private credit to pension funds and endowments, has worked hard to provide you and me with the same “opportunities” through our 401(k) and 403(b) plans.
The long-term record for these funds isn’t encouraging. And we should all remember that Warren Buffett won his bet against a hedge fund manager. The S&P 500 beat the hedge fund cold.
You can be certain that the sales force will either not know, or will overlook, this fact when the “opportunity” comes your way.
Dare I mention that “Perfect is the enemy of good?”
Related columns:
Scott Burns, “How To Build The Basic Couch Potato Portfolio Anywhere, For Next To Nothing,” 9/12/2018:
https://scottburns.com/how-to-build-the-basic-couch-potato-portfolio-anywhere-for-next-to-nothing/
Sources and References:
LaToya Scott, “Warren Buffett’s $1M Bet: Why ‘Simple’ Index Funds Crushed Hedge Funds by 7.1% to 2.2% Over a Decade,” 2/3/2025: https://finance.yahoo.com/news/warren-buffetts-1m-bet-why-000017682.html
Inception dates for ETFs from the website ETFDb: https://etfdb.com/compare/market-cap/
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, 5/7/26 A Couch Potato Place Setting in Dallas
(c) Scott Burns, 2026