ETF Education

Set it and forget it: How to invest for the long haul

Make one smart move, then step back: Set-it-and-forget-it investing lets compounding do the heavy lifting. Having time on your side is one of the most powerful tools for investors.
Automation beats impulse: Professional managers handle allocation and rebalancing decisions so you don’t panic during market swings.
Check in occasionally: A periodic review keeps your strategy on track. Even the best autopilot system benefits from a quick course correction now and then.

March 9, 2026 7 min read

Anyone who’s ever planted a tree knows that you don't dig it up every week to check on the roots or constantly rearrange the soil. You plant the tree in fertile ground, give it what it needs, and let time work its magic. Twenty years later, you've got yourself a tree that yields fruit, provides shade, and creates a natural hedge from nosy neighbors.

That’s the spirit behind “set-it-and-forget-it” investing. Make one smart choice, then let compounding do the rest.

What is 'set it and forget it?’

At its core, set it and forget it is about letting the strategy do the work. You select the funds you want to invest in upfront and then let the strategy do the heavy lifting. No tinkering. No constant monitoring. No panic every time the market sneezes.

Sound simple, right? It can be, as long as you stick to the plan. The tricky part is resisting the temptation to tweak, trade, and chase returns. That’s why understanding your options upfront matters. After you make your investment, step back and try not to constantly second-guess yourself.

Even Warren Buffett follows a version of this approach. His hallmark style is to buy good companies, hold them for years, and let time do the work.

So what are the main ways to set it and forget it?

Target-date funds

You make one investment, and the fund allocates your money in a way that’s appropriate for your target date. The funds follow a glidepath that automatically adjusts from aggressive (more stocks) to conservative (more bonds) as you approach your target date, making them a popular option in 401(k) accounts.

A 2055 fund (meaning you’d like to retire in 2055) is likely to currently hold a much greater proportion of stocks than bonds. Over decades, the fund makes automatic adjustments toward a more conservative allocation mix—and you don’t have to lift a finger.

Balanced funds

Balanced funds are like maintaining consistent soil conditions. They keep a fixed stock/bond allocation—typically 60/40—and rebalance periodically. Investors who value stability and low maintenance may like starting here.

All-in-one ETFs

These funds bundle multiple asset classes into a single trade. If you pick one that’s 80% stocks and 20% bonds, it stays that way forever. No fuss. No drama. They’re ideal for investors who want broad market exposure with minimal complexity.

Why do investors like set it and forget?

Short answer? Because historically, it’s had a strong track record of working.

A Morningstar study found that most investors hurt themselves by trading too often. The average investor had a 7% annual return over the last decade. Had they left their money alone, they would have had an 8.2% return.¹ The lesson is clear: Less tinkering leads to more compounding.

Figure 1 tells a compelling story. It tracks what happened to $1,000 invested in the S&P 500 over the last 100 years. Despite a series of severe market drops—Black Monday, the dot-com bubble burst, the global financial crisis, and the 2022 bear market—that initial investment grew to just shy of $400,000 for investors who stayed the course.

It’s a different outcome for those who pull their money out of the market during major dips. If an investor missed just the 20 best trading day between 1928 and 2025, their returns would be roughly half compared to those who stayed invested. Easy to point out in retrospect, we know.

When were the 20 best trading days between 1928 and now? Often during bear markets or extreme volatility—like during the 2008 financial crisis or 2020 pandemic. Or in other words, when people are most likely to panic.

Benefits of set-it-and-forget-it funds

Set-it-and-forget-it funds are built to do the heavy lifting for you—so your portfolio can keep working while you get on with your life. They offer:

Simplicity

Make one decision and let the fund handle diversification, rebalancing, and adjustments over time.

Discipline

Automated allocation keeps you on track through market ups and downs.

Diversification

Gain exposure to a broad mix of asset classes in a single investment.

Long-term growth potential

Harness the power of compounding by letting returns build over time.

Regular rebalancing

Keeps your investment mix on track, a task many investors tend to overlook.

Why they work for long-term investors

Set-it-and-forget-it funds are designed to do several jobs—so you don’t have to:

Automate your portfolio: They act as a guardrail for your emotions, helping prevent reactions to every market headline while handling routine tasks like rebalancing.
Simplify the investing experience: Setting it and forgetting it reduces decision fatigue by turning hundreds of investment choices into a single, thoughtful decision.
Offer you “behavioral support”: This approach can help discourage panic selling during downturns and supports more rational, long-term decision-making.
Makes professional management accessible: They provide access to Institutional-level strategies without requiring you to be an expert.
Help with consistency: This approach encourages steady progress over time through regular contributions and automatic rebalancing.

How to choose the right set-it-and-forget-it investment

Your best option depends on your situation, goals, and desire for involvement.

Figure 2: Comparing set-it-and-forget-it fund types

Option	How it works	Adjusts over time?	May be ideal for
Target-date fund	Glidepath shifts allocation toward bonds as date nears	Yes	Retirement savers
Balanced fund	Fixed stock/bond mix	No	Investors seeking steady exposure
All-in-one ETF	Diversified ETF in a single trade	No	DIY investors

Other factors to consider

Timeline: Target-date funds are ideal for retirement. Balanced funds or all-in-one ETFs work for general wealth building. Shorter horizons (under 10 years) usually favor more conservative allocations.
Fees: Fees are like termites—they look tiny but can eat away at your wealth over decades. Compare fund expense ratios and platform fees carefully.
Asset allocation: Check what the fund invests in. Global diversification? Tech-heavy bets? Know what you own.
Automation needs: Do you want your allocation to shift with age? Target-date funds do that. Prefer consistency? Balanced or an all-in-one ETF might better suit your needs.
Account type: Tax-advantaged funds like 401(k)s and IRAs amplify the benefits of set-it-and-forget-investments.

Set-it-and-forget-it alternatives if you want more control

Set it and forget it doesn’t mean you can’t play an active role in your portfolio. Other approaches offer more control while staying simple:

Core-satellite strategy

Use a broad market fund like one of our S&P 500 ETFs as your “core” holding (70-80% of your portfolio). Then, add smaller "satellite" positions in specific sectors, themes, or asset classes you want to emphasize.

Simple three-fund portfolio

Combine a broad stock market fund like the lowest-cost S&P 500 ETF on the market,² State Street® SPDR® Portfolio S&P 500® ETF (SPYM), an international stock fund, and a bond fund in proportions you control. This approach offers broad diversification with more customization than all-in-one solutions.

Lifecycle fund hybrids

Start with a target-date fund and layer in small allocations to real estate, emerging markets, or other themes you want to emphasize.

Periodic rebalancing

Build your own ETF portfolio using broad index funds and rebalance annually or when allocations drift significantly from targets.

These strategies require more attention than true autopilot, but they give you greater control over asset allocation and investment decisions while keeping things simple.

Investing for the long haul? It starts here

Set-it-and-forget-it investing has a proven track record of working because it solves real investor problems: emotions, complexity, and lack of time. Putting your investments on autopilot lets you make one upfront decision, knowing your investments are working hard in the background.

Just like a tree needs checked for pests and proper water supply during dry spells, automated investments need periodic check-ins, too. Goals change. Markets shift. Life happens. A yearly review keeps your strategy in line to help you stay on track.

Investing doesn’t have to be stressful. With the right set-it-and-forget-it approach, you can plant the seeds today—giving your portfolio the opportunity to grow over the long term and take you where you want to go.

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Frequently asked questions

Where should I start with set-it-and-forget-it funds?

Target-date funds are the easiest: pick a date and the fund handles the rest. All-in-one ETFs work for general wealth building. Broad index ETFs like our S&P 500 ETFs are another option, but they don’t include other asset classes like bonds.

Are set-it-and-forget-it funds good for retirement?

What’s the difference between a target-date fund and a balanced fund?

Can you lose money with a set-it-and-forget-it fund?

Glossary

60/40
Shorthand for an asset allocation approach that combines equities and fixed income, with 60 percent in stocks and the remaining 40 percent in bonds. The combination is meant to balance potential to generate capital gains (and losses) associated with stocks with the capacity to protect principal inherent in income-generating bonds.

Asset allocation
An investment strategy of mixing a portfolio’s stocks, bonds and cash equivalents—and sometimes other assets—to balance risk and return according to an individual’s goals, risk tolerance and investment horizon.

Balanced fund
A basic multi-asset class portfolio—often packaged in a single pooled security—that combines a stock component, a bond component and sometimes a money market fund component. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate, or higher equity, component, or conservative, or higher fixed-income, component orientation. A “60/40” combination of stocks and bonds, respectively, is one such balanced fund approach.

Black Monday
Refers to global stock market crash on October 19, 1987, where major indexes (including the Dow Jones Industrial Average) fell dramatically in a single day—wiping out more than $500 billion in market value. The unprecedented event exposed vulnerabilities in financial systems, including the impact of computerized trading, panic selling, and insufficient safeguards against rapid sell-off.

Dot-com bubble
The speculative stock market run-up of the late 1990s that grew out of excitement about the potential of the Internet. While companies such as eBay and Amazon were born in this period, countless other start-ups with vague business plans and no profits were funded by investors dreaming of winning big. The fervor peaked on March 10, 2000, and a nearly three-year bear market followed.

Exchange traded fund (ETF)
An ETF is an open-ended fund that provides exposure to underlying investment, usually an index. Like an individual stock, an ETF trades on an exchange throughout the day. Unlike mutual funds, ETFs can be sold short, purchased on margin and often have options chains attached to them.

Global financial crisis
It refers to the economic upheaval of 2007-2009 that is generally considered the largest downturn since the Great Depression of the 1930s. This crisis was triggered largely by the subprime mortgage crisis that led to the collapse of systemically vital US investment banks such as Bear Stearns and Lehman Brothers. An aggravating factor was the speculative spike in energy that lifted oil prices to almost $150 a barrel in the summer of 2008, and which surely contributed to the economic slowdown.

Target date fund
An investment fund designed to adjust an asset allocation mix over time, typically by becoming more conservative as the target date (usually retirement) approaches.

Footnotes

Disclosure

Important Risk Information

Investing involves risk including the risk of loss of principal.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.

Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.

Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.

Diversification does not ensure a profit or guarantee against loss.

There can be no assurance that a liquid market will be maintained for ETF shares.

While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress.

The trademarks and service marks referenced herein are the property of their respective owners. Third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to the use of such data.

Target date funds are designed for investors expecting to retire around the year indicated in each fund’s name. When choosing a Fund, investors should consider whether they anticipate retiring significantly earlier or later than age 65 even if such investors retire on or near a fund’s approximate target date. There may be other considerations relevant to fund selection and investors should select the fund that best meets their individual circumstances and investment goals. The funds' asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. The investment risks of each Fund change over time as its asset allocation changes.

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