The Lazy Investors’ guide: We reveal six ways to get richer with an Isa the hassle-free way

In most walks of life, the more effort you put into something, the better the outcome. Investing isn’t one of them.

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

But there is no evidence that spending endless hours watching stocks and tweaking a portfolio gets you any richer than a more hands-off approach — a quick check-up on how things are progressing once a year, or when your circumstances change.

On the contrary, constant meddling with your investments can lead to worse results than taking the lazier approach. Frequent buying and selling incurs fees, which eat into your profits.

Sit back and relax: Constant meddling with your investments can lead to worse results than taking the lazier approach

Attempting to time markets is a fool’s game — and often leads to you buying before markets fall and selling ahead of them rising. Even the experts struggle to beat the market most of the time.

So, if you fancy the returns offered by investing, but don’t have the time or inclination to take it on 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 hold true.

Not all portfolios will be suited to a light-touch approach — if you have a complicated range of holdings more regular scrutiny may be necessary. We go through the minimum you need to do to get started — and to keep your investments on track.

1. Don’t pick: buy everything

You could spend countless hours trying to find the very best investments — trawling company reports, fund sheets and economic forecasts. Or you could just buy the lot!

There are now a growing number of cheap, so-called index funds available to ordinary investors. They allow you to buy a sliver of 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 contain shares of each of the 100 biggest companies listed on the London Stock Exchange.

An MSCI World Index fund would hold shares in all the biggest companies around the world.

Simple steps: Attempting to time markets is a fool’s game — and often leads to you buying before markets fall and selling ahead of them rising

The disadvantage of these funds is that, by their nature, they cannot beat the market. They allow you to buy the whole market, which means you will do no better or worse than the average.

However, the advantage is that you save yourself the bother of trying to work out which investments are likely to make you more money than the rest.

Plus, over the long term, a simple, well-diversified portfolio of shares from around the world tends to rise in value and offer better returns than interest earned in a cash savings account.

The second advantage is that they are often very cheap.

For example, Fidelity’s Index UK fund gives you an investment in the companies listed on the London Stock Exchange — with an ongoing charge of 0.06 per cent. 

To put that into perspective, actively managed funds, where a portfolio of companies is hand-picked by an expert fund manager, can easily levy annual charges of more than 1 per cent.

2. Or just buy one single fund

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

For example, if you are saving for retirement, asset manager Vanguard offers a range of Target Retirement funds that simply require you to state when you hope to stop working to determine which one is right for you.

The funds contain both shares and bonds in a combination appropriate for someone of your life stage. As you age, Vanguard shifts the mix of shares and bonds so that the fund changes with you — rather than you having to switch funds as you grow older. They cost just 0.24 per cent in ongoing charges.

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

In general, the greater the risk, the better the likely returns. Vanguard then suggests the appropriate fund. These cost 0.22 per cent per year.

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

Some are also designed for people who wish to draw an income from their investments and for those who wish to invest only in assets that have been screened for their Environmental, Social and Governance track record. These have respective ongoing charges of 0.17 per cent — or 0.28 per cent for the income version.

Unlike the Vanguard funds, these have more built-in flexibility to change the composition of the portfolio according to market conditions. But, again, you don’t need to worry as it is all done for you.

The BMO Sustainable Universal MAP range is 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 per cent.

High Street banks and investment platforms also often offer similar fund ranges that require little or no expertise from investors to hold them.

However, if you’re going to opt for one of these, it is worth doing a quick check of the fees — and comparing the performance to other similar funds.

3. Decide where to buy your fund

Most investors don’t hold funds directly. Instead, they open an account on an investment platform and use it to buy funds.

Picking a platform is straightforward. The main things you’ll want to consider are fees, what kind of service it offers and the investments it allows you to buy.

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

An Isa is a great place to start if you are investing for the first time. However, you could also consider a pension and decide which one is right for you.

Platforms also offer general investment accounts, but these don’t provide the tax benefits of pensions or Isas, so should only be used once these tax-friendly allowances have been exhausted.

4. Check every now and then

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

The main thing you need to keep an eye on is the level of investment risk you are taking.

If you are checking your portfolio with trepidation regularly and the thought of it is keeping you up at night, that can be a good indication that you’ve taken on too much risk.

Risk tolerance is not static — it can change as your circumstances do — for example if you are reaching retirement or rethinking your investment goals. So, you will need to check in from time to time.

5. Get more involved later

You may find that you love investing and would like to get a bit more hands-on. In that case, a so-called satellite investment approach can work well.

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

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

That way, you get to test your convictions, but without risking your whole investment portfolio on them.

6. Don’t take your eyes off the fees

One thing you cannot do is forget about the fees. 

Don’t overpay — for your investment platform, funds, or any other fees. They eat into your returns and erode your wealth.

This post first appeared on Dailymail.co.uk