Couch Potato Stock Portfolio: 10 Best Stocks To Buy

Published June 26, 2023 at 11:55 am EDT Updated September 7, 2026 at 2:41 pm EDT

In this article, we will take a look at the couch potato stock portfolio.

If you hate the constant need to adjust your portfolio based on stock market news and economic developments, do not like to pay huge fees to active fund managers who promise those elusive hefty returns and want to set your stock investing on auto pilot, you are not alone. There’s a comprehensive stock investing strategy designed for people who want to take a long-term horizon for their investments and don’t want to waste their time, energies and money on daily, active portfolio management. Personal finance writer named Scott Burns is behind this investment philosophy which is now very popular all over the world. The reason why couch potato investing strategy got traction and gained popularity is simple: it works.

Scott Burns posts the annual performance of the couch potato investing strategy every year. For 2022, Burns posted some numbers that yet again testify to the effectiveness of couch potato investing. Burns started his report with some assumptions before giving some juicy numbers.

“Imagine you retired at the dawn of history, recently estimated as 1988, at age 65. You started your retirement with a $100,000 portfolio split between the total domestic stock market and the total domestic bond market. To pay the bills, you intended to use the 4 percent spending rule. You took an inflation-adjusted amount at the end of each year.”

After that Burns asks his readers to guess how much money this portfolio would have made after 35 years? According to him, by simply following the couch potato investing strategy (index investing), the initial $100,000 would stand at $728,880 as of the end of 2022. But Burns noted that this estimate does not take into account the “sequence of returns risk.” What does that mean? Simply put, like every portfolio, a couch potato portfolio would not post consistent or uniform returns. Some years it’d perform very well, some years it would disappoint. For example, in 2021 the couch potato stock portfolio would have been worth $884,481 according to Burns’ estimates. That means the portfolio worth declined in 2022. But Burns insists we should have a holistic approach in evaluating this strategy.

“But so what? The portfolio is way larger than expected or needed,” Burns added.

Retirement in 2023: Recommendations from a Couch Potato Investor

At the end of the report Burns recommended investors who are retiring in 2023 to tighten their belt and don’t withdraw too much from their retirement savings. To be specific, Burns said your spending should be less than 4% of your retirement portfolio worth. Burns also said that if inflation starts to drop in 2023 and stocks see a recovery, things could easily get back to normal and 2022 would be nothing more than a “bad memory.” However, if inflation does not come down, Burns believes things could change drastically in the retirement space.

“But if inflation continues high and stock prices fall further, we’re in for a sea change in retirement security.”

Another proof of the effectiveness of the couch potato investing strategy can be seen in the SPIVA reports. SPIVA reports are published by the S&P Dow Jones Indices to compare the performance of active equity and fixed-income mutual funds against their benchmarks. According to the 2021 SPIVA report, a whopping 79.6% of domestic equity funds lagged the S&P Composite 1500. The report also shows that large-cap funds continued their underperformance for the 12th consecutive calendar year, as 85% of active large-cap funds trailed the S&P 500 in 2021. The report also shows a graph about the percentage of domestic equity funds underperforming the S&P Composite 1500 on an Absolute Basis. The graph paints a depressing picture for active portfolio management since year after year the underperformance percentage for domestic equity funds seems to increase.

The report says:

“Fund managers often respond to evidence of active underperformance by claiming to offer better returns per unit of volatility (i.e., to outperform in risk-adjusted terms). This would be an appropriate counterargument, if only it were true. However, the data shows that the vast majority of actively managed funds underperformed on this metric as well. Among domestic equity funds, while 90%have underperformed the S&P Composite 1500 over the past 20 years, an even greater 95% did so on a risk-adjusted basis.”

Another important aspect of the couch potato investing strategy is having a long-term outlook. You cannot be a couch potato investor if you cannot remain invested in a certain index fund for years. A famous study in this regard is one by finance professors Hendrik Bessembinder of Arizona State University, Michael Cooper of the University of Utah and Feng Zhang of Southern Methodist University. The study found that only 46% of managed funds outperformed the total market over monthly horizons; 39% beat the market over 12-month periods; 34% over decade-long horizons. As you can see, when holding periods increase, managed funds’ performance declines.

Couch Potato Stock Portfolio: Best Stock Picks

Photo by Adrian Swancar on Unsplash

Our Methodology

While the couch potato investing philosophy tends to stay away from individual stock investing and promotes index investing, for this article we picked some stocks that are the top holdings of index funds loved by couch potato investors. These include Vanguard Index 500 Fund (VFIAX), Vanguard Total Stock Market (VTI), and iShares Core Growth ETF (XGRO), which is very famous among Canadian couch potato investors.

Couch Potato Stock Portfolio: 10 Best Stocks To Buy

10. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 73

Investing in oil giant Exxon Mobil Corporation (NYSE:XOM) comes with regular dividend payments and stock price appreciation prospects. What else does a couch investor need? Exxon Mobil Corporation has gained about 29% over the past five years and the company has upped its dividends for 39 straight years.

A total of 73 hedge funds in Insider Monkey’s database of 943 hedge funds had stakes in Exxon Mobil Corporation as of the end of the first quarter. The biggest stakeholder of Exxon Mobil Corporation during this period was Rajiv Jain’s GQG Partners which owns a $2.15 billion stake in the company.

9. Tesla Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 82

iShares Core Growth ETF Portfolio (XGRO) is extremely popular among couch potato stock investors on the internet, especially among the Canadian couch potato investing community. The top holding of XGRO is iShares Core S&P Total US Stock Mkt ETF (ITOT). Tesla Inc. (NASDAQ:TSLA) is a significant holding of ITOT, as well as many other index funds including Vanguard U.S. Total Market Index ETF (VUN), the Vanguard Index 500 Fund (VFIAX) and Vanguard Total Stock Market ETF (VTI).

As of the end of the first quarter of 2023, 82 hedge funds tracked by Insider Monkey had stakes in Tesla Inc.. The biggest stakeholder of Tesla Inc. is D E Shaw which had a $1.3 billion stake in the company.

8. Berkshire Hathaway Inc. (NYSE:BRK-B)

Number of Hedge Fund Holders: 108

Berkshire Hathaway Inc. (NYSE:BRK-B) is a conglomerate that is invested in a variety of businesses, including railroads, insurance, retail, apparel, electrical power and utilities. Investing in Berkshire Hathaway Inc. gives exposure to a lot of lucrative business areas without any need for active management or maneuvers, which makes the stock one of the ideal picks for any couch potato stock investor. Berkshire Hathaway Inc. is also among the top holdings of Vanguard U.S. Total Market Index ETF (VUN), the Vanguard Index 500 Fund (VFIAX) and Vanguard Total Stock Market ETF (VTI).

Out of the 943 hedge funds in Insider Monkey’s database of 943 funds, 108 hedge funds were long Berkshire Hathaway Inc.. The biggest stakeholder of Berkshire Hathaway Inc. was Michael Larson’s Bill & Melinda Gates Foundation Trust which had a $6 billion stake in the company.

7. UnitedHealth Group Inc. (NYSE:UNH)

Number of Hedge Fund Holders: 116

With over a decade of consistent dividend increases and dominance in the healthcare insurance sector, UnitedHealth Group Inc. (NYSE:UNH) is one of the best picks for any couch potato stock portfolio. Over the past five years, UnitedHealth Group Inc. has gained about 92%. The company is operating in a sector that is shielded from economic volatility and recessions relatively speaking.

That’s why hedge funds were upping their bets on UnitedHealth Group Inc. earlier this year. A total of 116 hedge funds in Insider Monkey’s database had stakes in UnitedHealth Group Inc., up from 110 funds in the previous quarter. The biggest stakeholder of UnitedHealth Group Inc. was Rajiv Jain’s GQG Partners which owns a $2.3 billion stake in the company.

6. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 131

Apple Inc. (NASDAQ:AAPL) is the biggest holding of the Vanguard Index 500 Fund (VFIAX) and many other major total market funds. Apple Inc. is one of the best stocks to buy for those who want to apply the couch potato investing strategy. Over the past five years, Apple Inc. has gained about 271%. In addition to the stock price gains, Apple Inc. has rewarded investors with regular and growing dividends over the past decade. That’s why hedge funds are also big fans of Apple Inc., the biggest of them being Oracle of Omaha Warren Buffett, who has a $151 billion stake in the company as of the end of March.

Silver Ring Value Partners made the following comment about Apple Inc. in its Q1 2023 investor letter:

“Exited the Apple Inc. (NASDAQ:AAPL) put options position, as I came to the conclusion that I was wrong about the degree to which the stock is overvalued. While I still believe it’s optimistically priced, the fundamentals over the last few years made me believe that my initial decision to buy the put options was wrong.”

5. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 132

NVIDIA Corporation (NASDAQ:NVDA) is one of the top holdings of Vanguard U.S. Total Market Index ETF (VUN), the Vanguard Index 500 Fund (VFIAX) and Vanguard Total Stock Market ETF (VTI). The advantage NVIDIA Corporation has in the GPU and chips industry will continue to make profits for the company in the future, driven by the AI revolution which is set to boost the demand for GPUs. Recently, NVIDIA Corporation shareholders rejoiced after the stock jumped significantly following strong Q1 results and impressive Q2 guidance.

A total of 132 hedge funds in Insider Monkey’s database of 943 funds reported owning stakes in NVIDIA Corporation as of the end of the first quarter. The biggest stakeholder of NVIDIA Corporation during this period was Rajiv Jain’s GQG Partners which owns a $2.3 billion stake in the company.

Harding Loevner Global Equity Strategy made the following comment about NVIDIA Corporation in its Q1 2023 investor letter:

“It also signaled lower capital expenditures and increased share repurchases. Other tech companies, including Salesforce, similarly benefited from plans to lower costs and increase profitability. Meanwhile, NVIDIA Corporation (NASDAQ:NVDA), the graphic-chips designer, surged amid investor enthusiasm over the potential commercial applications of artificial-intelligence technologies, such as ChatGPT, which requires the use of many chips.”

4. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 204

Alphabet Inc. (NASDAQ:GOOGL) is a significant holding of several total market index funds including Vanguard U.S. Total Market Index ETF (VUN), the Vanguard Index 500 Fund (VFIAX) and Vanguard Total Stock Market ETF (VTI). Alphabet Inc.’s dominance in the search engine market, its Cloud computing growth, and its investments in futuristic sectors make it one of the best stock picks for couch potato portfolio.

As of the end of the first quarter of 2023, 204 hedge funds in Insider Monkey’s database of 943 hedge funds were long Alphabet Inc.. The most notable stakeholder of Alphabet Inc. was Natixis Global Asset Management’s Harris Associates which owns a $3.83 billion stake in the company.

Lakehouse Global Growth Fund made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its April 2023 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) reported a modest quarterly result, with revenue and earnings per share up 2.6% and down 4.9% year-on-year, respectively. It was a mixed quarter with a weak advertising market offset by strong momentum in Google Cloud and growth in the YouTube subscription business. Advertisers continued to pull back on spending during the period, though we are starting to see quarter-on-quarter improvements in the performance of Google Search and YouTube ads. The highlight of the quarter was Google Cloud’s strong operational results, with revenues up 28% while posting profitability. This was driven by strong relationships with large enterprises and the partner ecosystems that have been built over the past four years. Moving forward, the opportunity for Alphabet to deliver consistent profitable growth relies on its ability to control costs and improve productivity. The recent restructuring round is a step in the right direction and we believe that management will be able to efficiently manage its costs while going after growth opportunities.”

3. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 220

Over the years Meta Platforms, Inc. (NASDAQ:META) has diversified its income streams significantly. In addition to owning Facebook, Instagram, WhatsApp, the company plans to invest heavily in the AI industry and launch new products. Recently, Meta Platforms, Inc. revealed the third version of its Quest headset, the Meta Quest 3.

The AR/VR headset will start from $500.

Its diverse investments and huge user base make Meta Platforms, Inc. a decent pick for any couch potato stock investor. It’s also a notable holding of many famous index funds including Vanguard U.S. Total Market Index ETF (VUN), the Vanguard Index 500 Fund (VFIAX) and Vanguard Total Stock Market ETF (VTI).

As of the end of the March 2023 quarter, 220 hedge funds tracked by Insider Monkey had stakes in Meta Platforms, Inc.. The biggest stakeholder of Meta Platforms, Inc. during this period was Philippe Laffont’s Coatue Management which owns a $1.71 billion stake in the company.

Harding Loevner Global Equity Strategy made the following comment about Meta Platforms, Inc. in its Q1 2023 investor letter:

“The losses from SVB and First Republic were significantly mitigated, though not fully offset, by a rebound in shares of growth companies, which contributed to outperformance among our Communication Services and IT holdings. Our biggest relative contributor was Meta Platforms, Inc. (NASDAQ:META), the parent of Facebook, which pledged to boost efficiency through layoffs and a hiring freeze.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 243

Amazon.com, Inc. (NASDAQ:AMZN) is an important part of the Vanguard Index 500 Fund (VFIAX). Wells Fargo & Company (NYSE:WFC) recently started covering Amazon.com, Inc. with an Overweight rating and a $159 price target as the firm called the ecommerce giant its top pick. Wells Fargo & Company believes retail margins in North America could return to 2019 levels in 2025.

As of the end of the first quarter of 2023, 243 hedge funds tracked by Insider Monkey had stakes in Amazon.com, Inc.. The biggest stakeholder of Wells Fargo & Company during this period was Natixis Global Asset Management’s Harris Associates which owns a $2.4 billion stake in the company.

Lakehouse Global Growth Fund made the following comment about Amazon.com, Inc. in its April 2023 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) delivered a positive quarterly result with overall growth and profitability coming in ahead of expectations. Net sales increased 9% year-on-year (11% constant currency) to $127 billion and operating profits increased 30% year-on-year to $4.5 billion. In retail, growth proved resilient and it was encouraging to see operating margins for the North American unit turn positive for the first time since mid 2021 – coming in at 1.2% (or roughly 1.5% ex-restructuring). Even more encouraging, though, was Andy Jassy’s comments that they are confident they can achieve pre-pandemic operating margin levels of 4%-6% for North America with time. Looking forward, we continue to believe there is significant margin expansion ahead as cost pressures related to external macro factors, such as elevated shipping and fuel costs, and also lower productivity and efficiency continue to ease over 2023.

On the other hand, the outlook for the company’s second largest segment, Amazon Web Services (AWS), wasn’t so rosy. AWS grew 16% year-on-year to $21.4 billion, which isn’t terrible, but was a material deceleration from last quarters growth of 20%. Concerns were only heightened by management’s comments that growth slowed even further to 11% in April. As has been the case over the last few quarters, the headwinds were driven by enterprise customers seeking to optimise cloud spending and management reiterated that the slowdown is macro-driven. These comments are consistent with what we have heard from other cloud providers, and in our view, the current headwinds are more a factor of strong comparison periods and cyclical weakness, as opposed to any fundamental issues. Taking a step back, AWS remains the leading cloud provider (in what is an increasingly two-horse race with Microsoft’s Azure) and with 90% of global IT spend still on-premise there is still plenty of runway for future growth. At current levels, Amazon’s valuation at 5x gross profit is the most attractive it’s been since the GFC and we remain confident that patient shareholders will be treated well as the company is set to deliver many years of solid revenue growth and margin expansion.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 289

Microsoft Corporation (NASDAQ:MSFT) is easily one of the obvious choices for any couch potato stock investor since the sheer size and first-mover advantage it has in the AI space are enough to propel MSFT shares higher in the coming years. The AI revolution that Microsoft Corporation is spearheading with its huge OpenAI investments and plans is just getting started, and many analysts believe investing in MSFT is one of the simplest ways to play the AI boom.

Microsoft Corporation is also the most popular stock among 943 hedge funds tracked by Insider Monkey.

You can also take a peek at 12 Best 5G Stocks To Buy Now and 10 Best Fast Growth Stocks To Buy.