Warren Buffett once said, “The first rule of investing is not to lose”. [money], And the second rule of investing is not to forget the first rule. And these are all the rules. Of course, your financial advisor won’t always be able to follow that rule—markets go down, and no one beats the market every time, not even Buffett himself—but when they can make you lose money. So how do you know when to pull the plug? ,You can use this tool to match you with a planner that meets your needs.,
A good rule of thumb when you look at losses in your portfolio: “Comparing the relative returns of your investment portfolio with that of the same target portfolio, over the same time period, can help you see when your losses are out of line.” If you have a portfolio with 60% in stocks and 40% in bonds, compare it to a similar portfolio,” says Tiffany Lamm-Balfour, investment spokeswoman for NerdWallet. You may want to get a second opinion from another advisor. Some brokerage firms may include a target portfolio as part of their statement, or a financial advisor may include it in a client’s portfolio review, says Lamm-Balfour. You can use a benchmark such as the S&P 500, but you will need to do a weighted average of one or more indices because a diversified portfolio will not be 100% invested in the S&P 500.” If your portfolio is 60%. Stocks and 40% bonds, you can do 60% for the S&P 500 and 40% for the Barclays Aggregate Bond Index, or something like that to get a more accurate representation of your actual portfolio,” says Lam-Balfour.
If you’re consistently underperforming the market, Lamm-Balfour recommends asking your advisor to see if the explanation makes sense. “You may want to get a second opinion to check whether your current investment is a good fit for your goals and whether you should go in a different direction,” says Lamm-Balfour.
It is also important that you consider whether your advisor has made investments in line with your goals and expectations. “The important thing is that customers have a clear understanding and expectation, so they are not caught off guard. Ariel Jacobs-Bitoni, Certified Financial Planner at Refresh Investments, says, “If an advisor finds a client unfairly investing in a portfolio that carries too much risk that doesn’t match their profile, I recommend they consult with the advisors.” Think about changing
Also remember that losing money isn’t always a dealbreaker. Louis Strohmayer, certified financial planner at Octavia Wealth Advisors, notes that advisors do not control market volatility, so it is difficult to judge their performance based solely on losses. “If the market is down 30% and your advisor loses you 10%, I can be glad the advisor didn’t lose me an additional 20%,” says Strohmayr. And, he adds, make sure your advisor is an attorney and an assistant for you. “They don’t have to judge your lifestyle, but they have to understand it. If it’s important to you, it should be important to them and they should find ways to help support your goals,” says Strohmeier. Huh.