A&G Financial Management, LLC
simplifying financial management for CORPORATIONS & INDIVIDUALS


Get the latest information here

Dear Financial Advisor: Why Is My Portfolio Doing So Badly? - TheStreet

I recently read this article from The Street, a well known and respected industry news agency, and thought I would share with you. Not because it's advice with which I would agree, but instead to say "Why?"

"Indeed, the S&P 500 is up 10% so far this year, through August 31, 2018, and your portfolio isn't."*

Why should you accept poor returns for 2018? Yes, you personal risk tolerance has significant impact on your returns, but isn't that your advisor's job - to minimize Beta (risk) and maximize Alpha (return).

"The only investor who would be up in double digits this year, is one who took a big gamble and said: "I'll put all my money into stocks. And I'm going to further bet on only the U.S. stock market, no international, no emerging markets." If you took that bet, you'd be up 10% this year. But of course, you didn't."

Would it have been a big gamble to be heavy in U.S. equities? Aren't international and emerging markets generally considered more aggressive? If international and emerging markets are doing poorly, why didn't your advisor adjust your portfolio?

"So send a little note to your advisor. Tell them you understand why your performance wasn't great this year and reassure them that you understand that you chose the correct long-term asset allocation, and you both look forward to putting the results of 2018 behind you."

Really? A thank you note for not making prudent adjustments in your portfolio? Maybe instead it's time to make a call to interview a new advisor.


maria amado