How to Monitor Investment Performance

monitor investment performanceIf your money is going to fund your retirement, your investment performance will impact when you retire, how you live during retirement, and your financial security late in life.  It’s your money is a rational reason to monitor investment performance of your advisor.

But, it also defies human nature and lower quality financial advisors know it and they take advantage of it to make money for them and their firms.

Download our ebook How to Monitor Investment Performance to obtain more details and also give you easy access to free tools to measure your relative performance.    Here’s a preview of what we’ve covered.

Trusting Advisors

One form of trust is letting advisors monitor their own performance. This means your only source for data and explanations for your performance is the advisor who invests your assets. This can be a major source of financial risk.

Types of Relationships

You should have a business relationship and not a personal relationship.  Understand the differences.

Full Disclosure

Your advisor should also be accountable for practicing full disclosure. That is, no pertinent information is withheld from you.

Conflict of Interest

Your financial advisor makes money from your assets. For this reason alone, he should not monitor his own performance. He has an inherent conflict of interest.

Performance Reports

A good financial advisor will provide quarterly reports that monitor the performance of your assets. The reports include data for current holdings, market values, transactions, and performance. This is the data you need to assess the results that are produced by your advisor.

Relative Performance

Your absolute performance (10%) tells you how your assets performed. But, it does not tell you how well your advisor performed. You need relative performance to make this determination. For example, your stock portfolio was up 10%, but the stock market was up 20%. On a relative basis you lagged the market by 50%.

Performance Benchmarks

There is an easy way to determine your relative performance and your advisor is not involved in this calculation.  It is FREE information, and it only takes a minute.

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