If you’re a Boglehead like myself, you can talk endlessly about the compounding powers of the three-fund “lazy portfolio”: some bonds, some domestic stocks, and some international ones. Set it and forget it; never look at it again until you need to. If you don’t feel comfortable with the three-fund portfolio, you might want to get a financial advisor who can pick specific stocks for you for an AUM. The opportunity cost is in your head: For a low-expense ratio, you can have some ETFs that fit the three-fund portfolio, or you can shove all decision-making onto an advisor who will charge more to manage your portfolio.
If you’re a Warren Buffett aficionado, you’ll recognize this as his ever-touted “circle of competence,” in which you stick to what you know and leave what you don’t know to those, well, who know. Invest in what you understand and on things that have long-term value, and leave the frequent trading and market volatility to those who know what they’re doing.
