401ks,  Current Events,  Return on Investment

Questions For Your Financial Advisor

Over the next few months, many investors will sit down with their financial advisor to look over their portfolio. Before the meeting, ask yourself what kind of investor you are. Do you simply want lower risk and higher returns that will beat the rate of inflation? Or do you want to succeed? Do you want to outperform the market?

I believe my clients want to win. They want their wealth to grow significantly. If this sounds like you, I encourage you to ask your Financial Advisor the big questions. For me, they are the following:

Look At The Real Dollar Terms
The first question you have to ask is, how is your portfolio performing in real dollars? Is your account growing or losing money?

Request A Performance Report Compared To The Market
To really win, you need to outperform the market. Sometimes financial advisors only compare your earnings to the rate of inflation. Don’t stand for this. Make sure they show you how your account has done compared to the Standard and Poor’s 500 (S&P 500) for a stock account or the appropriate bond index if it is a bond account.

Ask How Your Portfolio Is Picked
Every portfolio takes a hit from time to time. My clients have seen dips. This is to be expected. However, it’s important to position yourself for the upswing. Your financial advisor should have an understanding of what will happen over a 5 – 10 year period. Ask your advisor how he picks your portfolio.

Some advisors may say, “The firm makes recommendations and I take the firm’s recommendations.” Others might say, “The firm makes recommendations. I sort through their recommendations and pick the best of them.” If that’s the case and they’re successful, they should be able to provide you with a clear longer-term performance report.

As you evaluate your financial advisor’s responses to these questions, keep in mind what you first asked yourself. Do you simply want lower risk and higher returns that will beat the rate of inflation? Or do you want to “win”? Do you want to outperform the market?


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I want to hear your opinions; please leave a comment below and let me know your thoughts.