Your Advisor and You: Partners in Your Portfolio Decisions

No matter how sophisticated an investor you are, it’s important to have an expert to deal with your portfolio and advise you on changes.

If you have an advisor to manage your financial investments, congratulations; you’ve made the right move. But the relationship between you and your advisor is an ongoing partnership; you need to pull your weight. And it’s a good idea to understand your own portfolio. Here are some things to discuss with your advisor:

What am I invested in? Am I invested in stocks, bonds, or cash equivalents, and in what mix? Am I invested directly in these assets, or via mutual funds? What about real estate and commodities? How might that mix of assets change over time?

Is now a good time to buy? When to buy depends on several things: What’s happening in the overall market? What’s happening in a certain asset class or sector? Will this purchase fit with my investment goals? How attractive is the price? How much should I buy?

What do I do with winners? When my investments fare well, should I keep or sell them? Typically, successful investors will know the answer to this question (and the reasoning behind it) before they invest.

What do I do with losers? Not all investments work out, however well-conceived. It’s important to know at which point to sell a loser.

Your advisor is an expert. But you need to participate. The more you know about your own portfolio, the easier it will be for your advisor to help you.