Wall Street Potholes

Chapter 6The Un-Portfolio and Better Portfolio Management Techniques

Bob Centrella, CFA

It was early in 2011 and I sat there opposite my new client thinking, 20 years of hard work to build a nice-sized retirement fund and THIS is what his broker bought for him since he turned the money over to him a few years ago. Fast forward a few years and I came to find that that thought was going to be a common one in my head as I met with clients.

Individual investors often find themselves at the mercy of the person they hire and trust to create and manage their portfolio of assets. Many don't have the time to review transactions and research securities and funds that they own. They don't have the luxury of institutional investors who often get to choose from seasoned professionals with research teams, long track records, and customized portfolios. More often than not, it can be a broker or advisor who was handed the account or a “friend” in the financial business who is really not a money manager and he turned the assets over to him as a favor. Or it can be a self-managed portfolio where the individual is not able to devote the necessary time. In the end, too many portfolios are often poorly constructed and don't meet the objectives of the investor. In this chapter I'd like to talk about some of the portfolios of assets I've seen that were poorly constructed and spend some time on various aspects of proper investment management.

As part of the service of my company, Forza Investment Advisory, ...