Five Numbers Every Investor Should Know About Their Portfolio

Do you find yourself engaged in a conversation sometimes about your portfolio and someone asks you what should seem to be a simple question?   How much of your portfolio is in stocks and how much is in bonds?  Do you know what your biggest holding is in your portfolio?  Why did you pick that XYZ mutual fund? Or XYZ stock?  Nobody expects you to become an expert in investments, but as the CEO of your family finances you sure want to get yourself educated enough to be able to answer some important questions.  Here are five numbers every investor should know about their portfolio. What your risk level is currently – There are a whole number of ways to calculate risk depending on the angle you are taking with the question.  You aren’t going to be asked to know your beta, your alpha, or your Sharpe ratio because they are for the experts to know.  However, you should be able ...

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The Three P’s To Picking A Fund Manager

For those that have sat in a conference room building out a new strategy for your company, you know that often the team leader will discuss the three P’s: Purpose, Process, and Payoff. With well over 10,000 mutual funds in the marketplace and now a slew of actively managed exchange traded funds, picking a mutual fund manager may end up being one of the more challenging tasks for an investor in their 401(k) plan or those with a large portfolio. Is it best to pick a fund manager that is a lone ranger? Is it best to pick a fund manager that selects funds through a team approach? I have often asked investors, which is most important to win the horse race? The horse or the jockey? To be successful as an investor, I would suggest you filter them out by using the purpose, process, and payoff system. Purpose: Do you know exactly what outcome you are looking for with ...

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4 Lies Investors Will Tell Themselves Again

Do any of these stories ring true when you talk about how your portfolio is doing?   Here are four tall tales that I keep hearing year over year when people first come into our offices.   You are not alone, no one wants to admit that things haven’t gone as well as they expected.  Or perhaps they just don’t know at all?  Which story have you told yourself in the past? “I Have Killed It With My Stock Picks” I have never heard somebody come to a party ready to talk about their mutual fund or life insurance policy.  But stock picks?  Oh yes, this is a party favorite.   People LOVE to brag about the stock they bought that tripled or quadrupled in value whether it was a technology stock or some penny stock you have never heard of before in your life.   What they won’t tell you about is all of their losers because they don’t remember them.   How many ...

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