There are a lot of Couch Potatoes out there. As soon as a column on "the Couch Potato Portfolio" appeared, readers called and wrote.

"OK", they seemed to be saying, "I've done my part. I hit the Mute button. Now will you tell me EXACTLY how to do this?"

In case you missed it, the column showed that if you had divided your money in half and invested one portion in the Standard and Poors' 500 Index and the other portion in the Shearson/Lehman Intermediate Bond Index, you would have done very well.

Your only activity?

Rebalancing each year back to 50/50. Do that and your long term return would have been no further from the long term return on stocks than the "TV" button is from the "VCR" button.

To be specific, if you had followed this procedure from 1973 to the end of 1990, a period of great ups and downs, traumas, mystifications, and general angst, your return would have been 10.29 percent, only 0.27 percent less than the return on stocks. You would have had about half the ups and downs of the market and you would have beaten somewhere between 50 and 70 percent of all professional money managers.

How much work is involved?

Try this: once a year ­ ­ ­ like when you add new money ­ ­ ­ you take the total value of your investment and divide by "2". That tells you how much you need in stocks. And in bonds. So you move some money, as necessary, from stocks to bonds. Or vice versa. With telephone exchange privileges at most mutual fund families, you can do this is less time than it takes to go to the refrigerator. Indeed, as a timing exercise, I suggest you put a medium sized potato in your microwave: your annual portfolio management will be done in less than the 10 minutes it takes to cook the potato.

Are you ready to invest?

Here are some recipes:

Basic, Humble Couch Potato Portfolio.

Call Vanguard, the mother of all indexers, at 800 ­662 ­7447, and ask to make the minimum investment in the Vanguard Index 500 fund, which mimics the Standard and Poors' 500 index, and the Vanguard Fixed Income Short Term Government Bond Fund. Both have minimum investments of $3,000 and allow additional investments of only $100. That means you start with $6,000 and add as little as $100 at a time after that.

Yes, I know the fixed income fund is "short term" not "intermediate". But the return will be VERY close. Vanguard doesn't have an intermediate term indexed bond fund. The average equity fund has an expense ratio ( the annual cost of running the fund expressed as a percentage of assets under management) of 1.53 percent; the average fixed income fund has an expense ratio of 0.99 percent. Mix them 50/50 and you have an average expense ratio for a stocks/bonds portfolio of 1.26 percent a year.

According to Morningstar, the Chicago publisher that tracks mutual fund performance, the Vanguard Index 500 fund has an expense ratio of 0.22 percent while their short term government bond fund has an expense ratio of 0.28 percent. That averages to 0.25 percent, indicating that you can save a full 1.01 percent a year by indexing.

In the last three years the short term bond fund was in the 49th percentile of all fixed income funds for returns. The Vanguard Index 500 stock fund was in the 17th percentile, outperforming 83 percent of all equity fund managers during the same period.

Same Recipe, Different Kitchens.

Yes, you can do this at other fund families. It just takes a little flexibility.

At Fidelity, the nations' largest mutual fund firm, you could buy the Fidelity Spartan Market Index fund with a minimum investment of $10,000. A portion of the expenses are being covered by the company now so we cannot say what the long term expense ratio will be except that it will be low. Shares redeemed before 6 months are charged a 0.5 percent redemption fee. All accounts are charged a $10 annual fee and $5 for each exchange or redemption. On the fixed income side you would buy the Spartan Limited Maturity Government Securities fund. Telephone 800 ­544 ­8888.

Dreyfus has its "Peoples Fund" which imitates the 500 index. They also have a Short ­Intermediate Government fund. Telephone 800 ­645 ­6561.

Still another option, if you are willing to pay a small commission for acquiring ANY fund, is to have a brokerage account at Charles Schwab. There you can invest in their Schwab 1000 fund which is an index of the 1000 largest companies in America. This fund has no sales cost and an expected maximum expense ratio of 0.45 percent. To fill out the CP Portfolio you could then buy any Intermediate maturity bond fund you like. A $3,000 transaction would cost $29. Here, for instance, is a list of funds that are no ­load, have 5 star ratings from Morningstar, and offer short to intermediate term average maturities:

Federated Short/Intermediate Government Fidelity Intermediate Bond Neuberger Berman Limited Maturity T Rowe Price Short Term Bond Strong Short Term Bond Vanguard Short Term Bond

Some critics would argue that investing in only the largest companies will limit your return. It might. But the largest 500 companies account for about 85 percent of all market value and the next 500 only about 8 percent.

The couch potato investor wants to buy the market. The couch potato also knows that if things get bad for the top 1000 companies, they will be terrible for the remaining 4000.

Spicy Variations.

In case you are overwhelmed with energy and want to make your life more complicated, save taxes, or have something to talk about at parties, you can do things to make the CP portfolio more interesting... and maybe provide a slightly higher return.

Variation #1:

If your couch potato portfolio isn't in an IRA, Keogh, SEP, or 401k plan where returns grow tax deferred, you might want to substitute an Intermediate Term TAX FREE Bond fund for the Intermediate term taxable bond fund index.

The Fidelity Spartan Limited Maturity government fund, for instance, recently offered a yield of 7.80 percent on an average maturity of 6.3 years while the Fidelity Spartan Short ­Intermediate Tax Free fund was yielding 5.52 percent on a 2.7 year average maturity. Adjusted for a 28 percent tax bracket, that's the equivalent of a 7.67 percent taxable yield. No big advantage to go tax ­free, in this instance, but some people HATE to pay taxes.

You can make similar substitutions in most of the major fund families.

Variation #2:

If you have enough money, you can virtually eliminate management costs by building a "ladder" of intermediate term securities. A ladder of Treasury securities from 1 to 10 years will have an average maturity of 5 years and eventually will carry the yield of a 10 year security: result, more stability, more income, and NO expenses. You can do much the same with a ladder of municipal bonds if you need tax free income. With the rest of the money in an index fund, your total annual expense could drop below 15 basis points.

Variation #3:

Try to get Intermediate or greater yields with less risk by investing in one of the growing number of funds dedicated to adjustable rate mortgages. As this is written, the one year Treasury index is 5.40 percent. A 10 year Treasury earns about 200 basis points, or 2 percent, more. This is much larger than the usual "spread".

Adjustable rate mortgages, however, are structured to earn what a one year Treasury earns, plus 2.75 percent. Even after you subtract the cost of securitizing and servicing the mortgage and the cost of managing a fund, the net return is likely to be close to intermediate term securities with much less in price ups and downs. David Yuen, portfolio manager at the Franklin Adjustable Government fund, aims at a portfolio return that is 200 basis points over the one year Treasury index. Subtract the cost of managing the fund, 39 basis points in 1990, and the net return is about 160 basis points over one year Treasuries. Recently, for instance, the annualized yield was 6.86 percent.

What does that mean?

Adjustable Rate Mortgage funds may be the Ultimate Intermediate Security ­ ­ ­ they provide the return of 5 to 10 year securities with the price volatility of a 1 or 2 year security. Franklins', which carries a 4 percent commission load, is the largest, oldest, and has earned a 5 star rating from Morningstar. Competition, however, is rising.

Now, back to Oprah.