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By Christine Benz and Michael Rawson, CFA | 04-25-2012 01:00 PM

Create a Portfolio You Don't Have to Babysit

In this special one-hour presentation, Morningstar director of personal finance Christine Benz and ETF expert Mike Rawson discuss how to build a low-maintenance, hands-free portfolio that will help you reach your financial goals.

Note to viewers: Filmed in late April 2012, this Morningstar presentation was part of Money Smart Week, a series of free classes and activities organized by the Federal Reserve Bank of Chicago and designed to help consumers better manage their personal finances. Morningstar is a Money Smart Week partner.

Moderator: Welcome to Morningstar. Thank you for attending today's Money Smart Week event. Today's presentation is one of hundreds around the country, free education events that are going on in connection with Money Smart Week.

We have financial institutions, government agencies, nonprofits, libraries, and schools that are all joining forces with Money Smart Week to raise awareness about financial education and provide resources to the public.

Morningstar investing experts Christine Benz and Mike Rawson will lead today's session about how to create a portfolio that you don't have to babysit. They'll share some advice on constructing a hands-free portfolio and also some sample portfolios for investors at different life stages.

Christine is Morningstar's director of personal finance and author of the book 30-Minute Money Solutions. Mike is an ETF analyst with Morningstar and holds the Charted Financial Analyst designation.

Thank you for coming today, and enjoy the presentation.

Christine Benz: Thank you all for coming in today on this rainy April afternoon. I really love these events, because I do get a chance to talk to some of our readers and subscribers and investors just about what's on their minds.

So, Mike and I will leave room for questions at the end of the presentation. We are recording or webcasting this event, so if you could hold your questions until the end that would be really helpful.

Again I thank you all for coming.

If you read my stuff on Morningstar, you know that this concept of helping investors find ways to reach their financial goals in the most simple and straightforward possible ways is a big focus for me here at Morningstar, and that was really the impetus for this presentation. Investors frequently tell me that they don't have time to create and oversee portfolios on an ongoing basis. They are willing to invest the time at the outset, but in terms of ongoing maintenance, picking individual stocks, or overseeing individual fund managers, they just don't have time to do that babysitting. So that's what we're going to focus on tonight.

We're also, I hope, going to serve up some ideas for even those of you who are active, hands-on investors, who do have the time and the inclination to babysit your portfolios. You may recognize that there might be a point in your life when you are not going to be able to keep doing that, and maybe your spouse has no inclination to manage the investments. So, at some point, you may want to create a portfolio that is more or less hands-free. So, we will share some ideas for doing that.

I'm happy to say that my colleague Mike Rawson is here. He is an exchange-traded fund specialist, and I think in a lot of ways, ETFs and index funds are really ideal building blocks for hands-free sorts of portfolios. So, I'm glad Mike is here to share his expertise, and he will also share some specific ideas for what "no babysitter required" portfolios might look like.

So, I'm just going to start by giving you a quick roadmap of what we'll cover in this presentation. I'm going to start by sharing what I think are essential ingredients for hands-free portfolios. I'll also talk about how you can break down the process of creating a hands-free portfolio into a few simple steps, and I'll share what those steps are.

And then, as I said, Mike will share some sample portfolios for investors at various life stages--both for investors who are currently retired as well as those for whom retirement is further off into the future.


All securities mentioned in this video

Vanguard Balanced Index VBINX
SPDR Gold Shares GLD
PowerShares QQQ QQQ
Vanguard Total Stock Market ETF VTI
iShares Barclays Aggregate Bond AGG
SPDR Barclays Capital International Treasury Bond BWX
iShares Gold Trust IAU
iShares Barclays TIPS Bond TIP
Vanguard Total International Stock Index ETF VXUS
Procter & Gamble PG
PIMCO Total Return PTTRX
Harbor Bond HABDX
Metropolitan West Total Return Bond MWTRX
Dodge & Cox Income DODIX
Templeton Global Bond TPINX

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