Q. I really like your low-cost Couch Potato investing approach. I would like to implement one of your Couch Potato Building Block portfolios and I am meeting with my Fidelity advisor to help me do this. Can you give me some tips? —D.Y., Paterson, NJ

A. Here is what I suggest. Use a Fidelity brokerage account to create your Couch Potato portfolio. Build it with low-cost exchange traded funds. Fidelity offers 65 such funds, commission-free. To build a basic Couch Potato portfolio you could start with this list of ETFs, five of which are on the commission-free list at Fidelity:

  • iShares TIPS Bond (TIP)
  • iShares Core S&P Total U.S. Stock Market (ITOT)
  • iShares Core MSCI EAFE (IEFA)
  • iShares International Treasury Bond (IGOV)
  • iShares U.S. Real Estate (IYR)
  • Vanguard Energy Index (VDE)

Note that the last ETF is not on the no-commission list, so a commission payment will be necessary. The cost of an online trade commission at Fidelity is $7.95. These six ETFs will allow you to build the most basic five of the Couch Potato Building Block portfolios: the two fund Couch Potato, the three fund Margarita, the four fund Four Square, the five fund Five Fold and the six fund Six Ways from Sunday.

For more information on simple portfolio building, you can visit my website, www.assetbuilder, where you will find a link to my “Couch Potato Cookbook” and another link to a monthly update of Couch Potato Building Block returns over periods out to five years. And here is a link to the Fidelity list of commission free ETFs: fidelity.com/etfs/ishares-view-all.

Q. I have a question about my 401(k): It is located in my former employer's system, The Boeing Company. I retired from Boeing in 2008. I have about $145,000 in their diversified accounts. I keep reading advice that suggests that monies should not stay behind in a company after retirement. Should I move these funds to another broker that handles 401(k) s? And if so, do you have any recommendations? I am a USAA member, and am considering moving the funds to them. I am also a Raymond James customer with an IRA with them; with about $125,000 in it. What should I do? —D.C., Seattle, WA

A. Many workers, particularly those who work for relatively small companies, can benefit by moving from their employer sponsored 401(k) plan because they can choose to move to a lower cost plan. This will allow them to keep more of the return on their own money. Boeing, however, is a very large company. It's 401(k) plan can get in the ring with Exxon-Mobil, IBM, and Texas Instruments for its focus on low-cost index funds. It's balanced index fund, a 60/40 mix of equities and fixed income, has a cost of only 0.08 percent a year and the cost of its domestic equity and bond index funds is even lower. So you shouldn't be in a hurry to move— you'd save very little by moving, even if you moved to a very low cost firm.

The biggest factor that determines your cost of investing is the sales and marketing distribution channel used by the firm you move to. Move to a brokerage firm like Raymond James (or Merrill Lynch, Morgan Stanley, etc.) and you'll face a high cost distribution firm that will be targeting a "yield to broker" of about 2 percent— and that's if you have enough money to make your account worthwhile to them.

But if you continue on the Do-It-Yourself path that you initiated when you started saving in your 401(k) plan, you can move to a low-cost discount brokerage firm. This would include Vanguard, of course, but it would also include firms like Schwab, Fidelity and Ameritrade. As mentioned in other columns, the advent of commission free exchange traded funds means that a careful do-it-yourself investor can truly minimize management expenses. That's a good thing because it's your money and you need to make the most of it.