Couch Potato Portfolio

Background

The Couch Potato Portfolio was introduced by financial columnist Scott Burns as one of the simplest, most accessible investment strategies for individual investors. Burns designed it to prove that building wealth doesn’t require constant trading, stock picking, or market forecasts. The concept encourages investors to embrace a “set it and forget it” mindset—using just two broadly diversified index funds to capture the long-term growth of the markets while minimizing costs and effort. The name “Couch Potato” reflects the philosophy that successful investing should be lazy, disciplined, and boring.

Primary Goals

The primary goal of the Couch Potato Portfolio is to achieve steady, inflation-adjusted growth with minimal maintenance. It aims to balance growth and stability using only two funds, representing both productive assets (stocks) and real, inflation-protected assets (bonds). The strategy’s secondary goal is behavioral simplicity—reducing decision fatigue, emotional mistakes, and the urge to time markets.

The portfolio is designed to hold up across various economic environments:

• Economic expansion: Stocks provide growth through rising corporate earnings and broad market participation.
• Inflationary environments: Inflation-protected bonds (TIPS) preserve purchasing power as interest payments adjust with the Consumer Price Index.
• Deflation or recession: TIPS provide stability and income, cushioning declines in equity markets.
• Market volatility: The simple, balanced structure helps investors remain consistent and resist emotional reactions to short-term movements.

In essence, the Couch Potato Portfolio rewards patience and consistency rather than activity, showing that a low-cost, hands-off approach can compete with more complex strategies over the long term.

Construction

The Couch Potato Portfolio is built from two broad asset classes—equities and inflation-protected bonds—each serving a complementary purpose:

• U.S. total stock market: Provides exposure to the entire American equity market, capturing growth across all sectors and company sizes.
• Inflation-protected Treasury bonds (TIPS): Offer a reliable hedge against inflation while generating income and preserving capital during weaker market periods.

A common implementation allocates approximately 50% to U.S. stocks and 50% to inflation-protected bonds. This even split balances growth potential with real-return stability, allowing investors to maintain purchasing power while minimizing volatility. The portfolio exemplifies the philosophy that successful investing doesn’t have to be complicated—it simply requires a plan, low costs, and the discipline to stay invested.

Performance & Returns

Total Return by Period

Updated: Nov 07, 2025

1 Day	1 Week	28 Days	90 Days	1 Year	3 Years	5 Years	10 Years
0.12%	-0.96%	0.97%	2.80%	7.17%	36.37%	30.24%	83.40%

Total Return by Year

2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
12.66%	14.77%	-15.54%	15.34%	15.78%	19.32%	-3.21%	11.89%	8.82%	-0.72%

10 Year Performance

Total Return	Annualized Return	CAGR	Max Drawdown	Sharpe Ratio	Sortino Ratio	Calmar Ratio	Ulcer Index
83.40%	6.56%	6.27%	-38.26%	0.36	0.45	0.17	0.07

Asset Allocation

Symbol	Description	Weight %
VTI	Vanguard Total Stock Market ETF	50.0
TIP	iShares TIPS Bond ETF	50.0

Total Return Graph

Comparisons with Other Portfolios