Thursday, February 18, 2016

Investment Realities

Well, it has finally happened. The stock market has pulled back enough to pretty much knock all major portfolio managers down to size. I just took a look at some of the largest and best portfolio managers in the country and their recent performance. Most of them have returned as of January 31, 2016, -8% for the last year, a return of around 2% for the last three years and around 4% over the last five years. This is rather eye opening, don't you agree?

What generally happens in these situations is that the clients of investment firms see these dismal numbers on their account statements and blame it on their financial advisor. What they normally do is move their accounts to another advisor thinking that this is going to make a difference. However, the brutal truth is that the likelihood of a new advisor to significantly outperform your last financial adviser is slim to none. 

As much as it pains me to say it, you may be better off having a meeting with your financial advisor and letting them show you their market numbers for the last year, three years and five years. If their numbers are seriously out of whack from the numbers mentioned above, then you have good reason to move your accounts. However, if they have returned around 2% for the last three years and around 4% for the last five years, then they have been in a properly diversified portfolio of investments. I know this doesn't sound good, but it proves the point that leaving your financial adviser and moving to another one thinking your investment performance will improve significantly is really a fool's game.

If you really wanted to check up on how you are doing, then I have an idea for you. What if you could find a CFP® who could evaluate your investment performance for you without you having to move any of your investment accounts? In addition, what if this same CFP® could do this for the laughingly low fee of $500 per year?

Did you get that? You do not have to move any of your investment accounts and you have a highly qualified person to give your portfolio an annual look for only $500 per year. I call it Keep Your Assets. Take My Advice.™ Let someone, (that being me), be your overlay financial advisor and run a report on your accounts that shows you how you have done for the last one, three and five years. All I need is your account statements and I can go to work. You can even black out the account numbers. I don't need them to do my work.

Think of me as your financial quarterback directing the offense. If you are interested in a great service at a extraordinarily fair fee, then let me know and I will get to work on your behalf. 

My Form ADV 2A Registered Investment Adviser disclosure and my background disclosure, Form 2B is available on my web site at on the bottom right of our home page.