Lazy Portfolios Aren’t Lazy in Growing Wealth
In this issue:
- Latest in Retirement Savings & Personal Finance: Golden Rule and The Roth IRA Evangelist
- Lazy Portfolios Aren’t Lazy in Growing Wealth
- Tools & Tips: Investment Arithmetic
- Market Overview
Latest in Retirement Savings & Personal Finance: Golden Rule and The Roth IRA Evangelist
HE WHO HAS THE GOLD MAKES THE RULES
President Trump made that comment over Easter weekend — not entirely surprising, given the timing. Meanwhile, gold hasn’t exactly been quiet. Prices have been climbing non-stop, pushing into all-time highs again. Some of it is the usual — inflation, tariffs, geopolitical tension. In the background, central banks continue to hoard. Gold is still seen as a kind of insurance policy — especially when trust in fiat currencies feels shaky.
So just for context, here are the top 10 countries holding the most gold right now:
- United States: 8,134 tonnes
- Germany: 3,352 tonnes
- Italy: 2,452 tonnes
- France: 2,437 tonnes
- Russia: 2,336 tonnes
- China: 2,292 tonnes
- Switzerland: 1,040 tonnes
- Japan: 846 tonnes
- India: 841 tonnes
- Netherlands: 612 tonnes
So the U.S. holds the largest official gold reserves in the world, followed by Germany, Italy, France, Russia, and then China at number six. These gold holdings are often seen as a form of ultimate security — not just for currency backing, but also for political leverage in global negotiations. So when Trump brings it up in the context of stalled tariff talks, especially with China, the message is fairly clear: the U.S. still holds more cards. Whether that’s strictly about gold or more symbolic of broader economic power — it’s hard to say. But the framing is intentional.
The Roth Evangelists: Betting Big on a Tax-Free Retirement
In this Wallstreet Journal article, Paul and Emily Ross spent over a decade methodically converting every last dollar of their retirement savings into Roth accounts. Today, they sit on a $2 million all-Roth portfolio — and they won’t owe a penny in taxes when they begin to withdraw. For them, it wasn’t just a financial decision, it became a kind of mission. Paul calls himself a “Roth evangelist,” spreading the gospel to high school students, family members, and anyone else who will listen. He’s even been known to gift Christmas checks specifically to fund others’ Roth IRAs. The math — and the belief — runs deep in this family.
Their rationale is pretty straightforward: better to pay taxes now, while rates are (presumably) lower, than later when they may be higher. Of course, if you have no or little income (such as social security benefits) in retirement, you also have other benefits such as lower Medicare fees. But this approach comes with trade-offs. For years, they sacrificed tax deductions in the present, betting that the long-term benefits — tax-free growth, no required withdrawals, and flexibility for estate planning — would outweigh the short-term pain. It’s not for everyone, and they know it. But for those in the right financial position, the Rosses’ path shows just how powerful (and deliberate) a 100% Roth strategy can be.
Lazy Portfolios Aren’t Lazy in Growing Wealth
Lazy portfolios have become a quiet favorite among long-term investors — especially folks managing their own IRAs, 401(k)s, or just trying to stay the course in a regular brokerage account. We’ve put together a more comprehensive study on page Lazy Portfolios. The idea is simple enough: build a diversified portfolio once, and then… mostly do nothing. Just rebalance it once a year or so. No constant checking, no reacting to market noise. That’s why they’re called “lazy.” But not in a bad way. In a deliberate way.
See What Are Lazy Portfolios? for more detail.
They’re designed for long-term holders who care about staying invested and minimizing mistakes. You’re not chasing alpha or calling tops and bottoms. You just want steady exposure — to stocks, bonds, whatever mix suits your tolerance — and the discipline to stick with it. In most cases, that’s more than enough.
And implementing one? Pretty straightforward. If you’ve got a brokerage account or IRA, you can usually recreate a lazy portfolio using low-cost index funds or ETFs. If you’re using a 401(k) or 403(b), it may take a little more work — you’ll need to find similar funds inside your plan lineup that match the ones used in the model. Not perfect substitutes maybe, but close enough for the purpose. Once set up, it’s just rinse and repeat — rebalance once a year, ignore the rest.
For more details:
Performance-wise, lazy portfolios hold up quite well over the long run. Because they’re low maintenance, they tend to be more tax-efficient — especially helpful if you’re investing in taxable accounts. There’s less buying and selling, so fewer taxable events. But just as important: they cut down on implementation errors. You’re not making emotional trades, or reacting to every dip, or accidentally buying high. Of course, they’re still exposed to market volatility — they’ll rise and fall with the broader market. That’s part of the deal. But if you’re okay with that, and you’ve got the time horizon, they can be a great way to invest without needing to constantly second-guess.
For more details:
Of course, in the current volatile market, many more traditional stock and bond allocation lazy portfolios are subject to larger interim losses than other somewhat non-traditional ones such as Harry Browne Permanent Portfolio that allocates into gold. Read the Lazy Portfolios in Difference Market Conditions for more in-depth study.
See Lazy Portfolios page for more disucssions.
Tools & Tips: Investment Arithmetic
We present the following two simple arithmetic facts;
A 50% loss requires 100% gain to just break even
The asymmetric nature of loss and gain arithmetic is well published. The following table shows how the arithmetic is heavily tilted to loss percentages:
| Loss | Gain needed to break even |
|---|---|
| -10% | 11.1% |
| -20% | 25.0% |
| -30% | 42.9% |
| -40% | 66.7% |
| -50% | 100.0% |
| -60% | 150.0% |
The above is especially important now that we are at or close to a bear market.
The double difference between loss and gain
Supposed that an investor makes a mistake in a year that results in a 10% loss (maybe due to emotional issues, subjective or speculative calls etc.). Also assume that the strategy this investor intends to follow delivers a 10% return in the same year. The difference after this year between the incorrect and correct ones is (1.1-0.9)/0.9 = 22.2%. This difference is due to the fact that instead of losing 10%, the correct one gains 10%, so the actual amount with respect to the original amount is 1.1-09=0.2 (or 20%).
Refer to our previous newsletter June 9, 2014: The Arithmetic of Investment Mistakes for more details.
Market Overview
US stocks continued to retreat as currently investors are anxious to watch the tariff negotiation process, which has stalled, especially between the US and China.
The following table shows the major asset price returns and their trend scores, as of last Friday:
| Asset Class | 1 Weeks | 4 Weeks | 13 Weeks | 26 Weeks | 52 Weeks | Trend Score |
|---|---|---|---|---|---|---|
| US Stocks | -4.6% | -10.5% | -13.7% | -11.4% | 4.2% | -7.2% |
| Foreign Stocks | 1.1% | -3.5% | 2.9% | -3.1% | 6.1% | 0.7% |
| US REITs | -0.5% | -7.2% | -5.2% | -11.0% | 8.8% | -3.0% |
| Emerging Market Stocks | 0.1% | -5.9% | -1.0% | -8.9% | 5.7% | -2.0% |
| Bonds | -0.3% | -0.9% | 0.4% | -0.9% | 4.5% | 0.6% |
More detailed returns and trend scores can be found on MyPlanIQ.com Market Overview.
Staying the course!
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