The lazy investor’s guide: we reveal six ways to get richer hassle-free with an Isa

In most walks of life, the more effort you put into something, the better the outcome. Investing is not part of that.

Of course, it’s essential to do some research; you need to understand what you are doing with your money.

But there’s no evidence that spending endless hours looking at stocks and adjusting a portfolio will make you richer than a more hands-off approach – a quick check on progress once a year, or when your circumstances change.

On the contrary, constant meddling with your investments can lead to worse results than the lazier approach. Regular buying and selling incurs costs, which eat up your profits.

Trying to time the markets is a fool’s game – and often leads to buying before the markets fall and selling before the market rises. Even the experts struggle to beat the market most of the time.

So if you’re interested in the returns that investing offers, but don’t have the time or inclination to take it up as a new project or hobby, this guide is for you.

Even if you spend time getting to know your investments in depth, many of the principles offered here still apply.

Not all portfolios are suitable for a light-hearted approach; if you have a complex set of investments, more regular examination may be necessary. We’ll discuss the minimum you need to do to get started and keep your investments on track.

1. Don’t choose: buy everything

You can spend countless hours finding the very best investments: sifting through company reports, fund reviews and economic forecasts. Or you just buy the whole lot!

There are now a growing number of low-cost, so-called index funds available to ordinary investors. They offer you the opportunity to buy hundreds, thousands or even tens of thousands of companies in one fund.

They do this by buying shares in every company within a stock market index.

For example, a FTSE 100 tracker fund would hold shares of each of the 100 largest companies listed on the London Stock Exchange.

An MSCI World Index fund would hold shares of all the largest companies in the world.

The disadvantage of these funds is that by their nature they cannot beat the market. They allow you to buy the entire market, meaning you won’t do better or worse than the average.

The advantage, however, is that you save yourself the trouble of figuring out which investments are likely to make you more money than the rest.

Furthermore, a simple, well-diversified portfolio of stocks from around the world tends to appreciate in value over the long term and provide a better return than the interest earned on a savings account.

The second advantage is that they are often very cheap.

For example, Fidelity’s Index UK fund offers you an investment in companies listed on the London Stock Exchange – for an ongoing fee of 0.06 percent.

To put that into perspective, actively managed funds, where a portfolio of companies are carefully selected by an expert fund manager, can easily charge annual fees of more than 1 percent.

2. Or just buy a single fund

If you’re feeling super lazy, you can start by buying a single fund designed to contain everything you need for a balanced portfolio.

For example, if you’re saving for retirement, asset manager Vanguard offers a range of Target Retirement funds, where you simply need to indicate when you hope to stop working to determine which suits you best.

The funds contain both shares and bonds in a combination that suits someone in your stage of life. As you get older, Vanguard changes the mix of stocks and bonds so that the fund changes with you – instead of you having to switch funds as you get older. They cost just 0.24 percent in running costs.

The LifeStrategy range offers a similar level of simplicity. These are five funds, with a mix of shares and bonds, and you answer questions to determine how much risk you want to take.

In general, the greater the risk, the better the likely return. Vanguard then suggests the right fund. These cost 0.22 percent per year.

Asset manager BlackRock has a similar range called MyMap, which offers eight funds with different risk levels.

Some are also aimed at people who want to earn income from their investments and for those who only want to invest in assets that have been screened for their environmental, social and governance track record. These have respective ongoing charges of 0.17 percent – ​​or 0.28 percent for the income version.

Unlike Vanguard funds, these have more built-in flexibility to adjust portfolio composition based on market conditions. But again, you don’t have to worry because it’s all done for you.

The BMO Sustainable Universal MAP range consists of a set of five funds, each with a different risk profile.

These are designed with sustainability in mind and are overseen by a team of managers. They have an ongoing charge of 0.35 percent.

Banks and high street investment platforms often offer similar funds, which require little or no investor expertise to hold.

However, if you’re going to choose one of these funds, it’s worth quickly checking costs and comparing performance with other similar funds.

3. Decide where you want to buy your fund

Most investors do not hold money directly. Instead, they open an account on an investment platform and use it to buy money.

Choosing a platform is easy. The main things you need to consider are the cost, the type of service it offers and the investments you can buy.

You can read an excellent, in-depth guide on our sister website This is Money.

An Isa is a great place to start if you’re investing for the first time. However, you can also consider a pension and decide which pension suits you best.

Platforms also offer general investment accounts, but these do not offer the tax benefits of pensions or Isas, so should only be used once these tax-efficient provisions have been exhausted.

4. Check every now and then

If you’re investing for the long term and you have a portfolio you’re happy with, you may not need to check it more than once a year.

The most important thing to consider is the level of investment risk you are taking on.

If you regularly look at your portfolio with anxiety and the thought of it keeps you awake at night, it could be a good indication that you have taken on too much risk.

Risk tolerance is not static; it may change depending on your circumstances, for example if you retire or reconsider your investment goals. So you will have to check in every now and then.

5. Get more involved later

You may find that you enjoy investing and would like to gain some more hands-on experience. In that case, a so-called satellite investment approach can work well.

You buy a small number of low-cost index funds that will make up the majority of your investments and give you a nice solid, diversified foundation.

Then you add ‘satellites’: smaller holdings in more niche funds that invest in specific regions, sectors or themes.

This way you can test your beliefs, but without risking your entire investment portfolio on them.

6. Don’t take your eyes off the costs

One thing you can’t do is forget about costs.

Don’t pay too much – for your investment platform, funds or other costs. They eat your returns and erode your wealth.