Download Common Mistakes in Investment Portfolios

A RT ICL E :
Common Mistakes in Investment Portfolios
© 3/2011 Resource Strategies, Inc. All Rights Reserved.
By Keith M. Lichtcsien, CFP®, AEP®
• Investment objectives have not been clearly established and documented.
• Time weighted Rate of Return calculations have never been performed and reported,
and there is no method for evaluating performance relative to risk.
• The portfolio’s risk is high given its potential return.
• An Investment Policy Statement setting forth objectives and asset class ranges has
never been established.
• Cash flow parameters have never been established.
• There is no established method for systematically reviewing appropriateness
of investment vehicles.
• Pooled accounts and cash are held inside managed accounts.
• Lack of comfort and confidence with advisor relationship.
• Phantom Income and concomitant tax consequences are not being mitigated
or even considered.
• No disciplined process for rebalancing at specific intervals.
• Not tracking progress toward stated goals.
• No process for determining appropriate re-allocation decisions.
• Unwittingly and unnecessarily exposed to unsystematic risk.
• Advisor does not meet the 7 Standards test.
As always, please feel free to call us at 216-765-0121 regarding this or any planning related questions.
Fee-based Planning and Third Party Money Management offered through Resource Strategies, Inc., a State Registered Investment Advisor.
Securities offered through ValMark Securities, Inc. Member FINRA, SIPC. 130 Springside Drive, Suite 300 – Akron, Ohio 44333-2431 –
1.800.765.5201. Resource Strategies, Inc. is a separate entity from ValMark Securities, Inc.
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Fee-based Planning and Third Party Money Management offered through Resource Strategies, Inc., a State Registered Investment Advisor.
Securities offered through ValMark Securities, Inc. Member FINRA, SIPC. 130 Springside Drive, Suite 300 – Akron, Ohio 44333-2431 –
1.800.765.5201. Resource Strategies, Inc. is a separate entity from ValMark Securities, Inc.
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