Christine Benz of Morningstar advocates for simpler, less intensive financial strategies that still yield strong long-term outcomes, reducing stress and time investment for investors.
- Automating 15% of income into retirement accounts yields over $1.3 million in 30 years at 7% annual return
- Low-cost index funds with expense ratios under 0.10% can match market performance with minimal effort
- Portfolios with average fees below 0.30% outperform higher-fee alternatives over time due to compounding
- Holding diversified investments for at least five years reduces trading costs and tax liabilities
- Consistency in savings and investing matters more than chasing optimal timing or selection
- Simpler strategies improve adherence, which is a key driver of long-term financial outcomes
Financial success doesn't require perfection, according to Christine Benz, a senior investment analyst at Morningstar. She emphasizes that many investors spend excessive time chasing marginal gains, only to see diminishing returns on their effort. Instead, she recommends focusing on four 'good enough' strategies that deliver solid results with significantly less hassle. These approaches center on practicality over optimization. For instance, choosing a single low-cost, broad-market index fund—such as one tracking the S&P 500 with an expense ratio under 0.10%—can yield returns close to the market average over 20 years, without the need to constantly rebalance or hunt for outperforming managers. Another key move is automating retirement contributions to reach a target of 15% of gross income, even if not all of it goes into a 401(k). By directing 10% to a Roth IRA and 5% to a taxable brokerage account, investors can diversify tax exposure while consistently building wealth. Over 30 years, this strategy could grow to over $1.3 million assuming a 7% annual return. Benz also highlights the importance of keeping investment costs low. A portfolio with average expense ratios below 0.30% can outperform one with 1.0% or higher over time due to compounding fees. Additionally, she advises against frequent trading; holding a diversified portfolio for at least five years reduces transaction costs and capital gains taxes. These strategies are especially effective for individuals with busy schedules or limited financial expertise. By reducing the cognitive load and decision fatigue, investors are more likely to stay consistent, which is critical for long-term success.