Managing Your Investments: Selection, Rebalancing And Reporting

After you and your financial planner have decided on the most appropriate asset classes to include in your investment portfolio, and also have decided on the allocation of assets within the asset classes, the next step is to select the actual investments that are most likely to help your portfolio achieve the desired results.

Here are some excellent criteria you and your financial manager should consider when making investment selections:

1. Past performance compared to other investments having the same investment objective. Consideration shall be given to both performance rankings over various time frames and consistency of performance.

2. Costs relative to other funds with similar objectives and investment styles

3. Size of the fund

4. Length of time the fund has been in existence, and length of time it has been under the direction of the current manager(s). Also, consider whether or not there have been meaningful changes in the manager's organization and personnel.

5. The historical volatility and downside risk of each proposed investment

6. How well each proposed investment complements other assets in the portfolio

7. The current economic environment

8. The likelihood of future investment success, relative to other opportunities

Rebalancing procedures:

From time to time, market conditions may cause the portfolio's investment in various asset classes to vary from the established allocation. To remain consistent with the asset allocation guidelines established by your investment policy statement, your financial planner should review your portfolio and each asset class in which the portfolio is invested. If the actual weighting differs from the target weighting by an unacceptable amount from the recommended weighting, your financial planner should rebalance the portfolio to its recommended weighting.

Other factors to consider when rebalancing your portfolio are taxes, fees, the correlation among your selected asset classes, and the volatility of each asset class.


1. Ask your financial planner to provide you with a report each month that lists all the assets held in your accounts, values for each asset, and all the transactions affecting assets within your portfolio, including additions and withdrawals.

2. You should also ask your financial planner to provide you with a report no less frequently than quarterly, and that contains the following management reports:

3. Portfolio performance results over the last quarter, and from inception

4. Performance results of each individual investment for the same periods

5. Performance results of comparative benchmarks for the same periods

6. End of quarter status regarding asset allocation

7. Any recommendations for changes of the above

Meetings and communication:

A standard procedure for your financial planner to follow will be keeping you apprised of any material changes in outlook, recommended investment policy, and tactics. In addition, your planner should meet with you no less than annually, and preferably quarterly, to review and explain your portfolio's investment results and all related issues.

When managing your investments, it is important to work with an experienced, credentialed investment advisory firm like Synergetic Finance of Seattle. For more info. or to schedule a complimentary consultation, visit Synergetic Finance online.

This article was published on 23 Jul 2014 and has been viewed 527 times
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