Trick question: What does the optimal investment portfolio look
like? Do you know?
For example, is it the portfolio with the best performing 5-star
rated fund managers of yesteryear? Is it the investment account
that holds the hottest stocks (NasdaqGS:NFLX) or ETFs
(NasdaqGM:IBB) of the moment? Is it the portfolio built with
impressive risk-adjusted back-tested historical results? Is it the
portfolio with the lowest fees (NYSEARCA:SCHB)?
In my latest video titled, A
$1.2 Million Portfolio Built Like a Rock
, I do a Portfolio Report Card for 51-year old J.P. from Virginia.
Does he get an A, B, C, D, or F? His portfolio consists of a
$547,568 taxable account with
, $596,538 in a Fidelity 401(k) plan, and $84,827 in a self-managed
Roth IRA also with TD. Most of J.P.'s money is invested in
ETFs like the iShares Russell 1000 (NYSEARCA:IWB), iShares
Russell 2000 (NYSEARCA:IWM), and the iShares MSCI EAFE
(NYSEARCA:EFA) along with a few actively managed funds.
What are the 5 attributes of an optimal portfolio?
In my analysis of J.P.'s portfolio, I drop a few enormous clues
(five of them to be exact) as to what the precise attributes of an
optimally designed investment portfolio are. Can you name them?
Another Portfolio Report Card that I just completed was for a
45-year old mortgage underwriter (yes, they still exist!) from
Cincinnati, OH with a
$408,000 Advisor Managed Account that Flunks
. Is this the type of high-risk/high-fee nonsense that advisors are
recommending to clients these days?
There is no way for me to politely put it: It's alarming to see
so many licensed financial professionals with such an inadequate
skill set when it comes to proper portfolio construction and money
To attack the problem, my next Portfolio Workshop teaches
advisors how to correctly analyze and grade investment
portfolios. If you're a licensed financial advisor with a clean
disciplinary history, be sure to
I created the
Portfolio Report Card
to give people an unadulterated look at how their portfolios do in
key areas like risk, diversification, and performance. And my
challenge stands: If you take Ron DeLegge's Portfolio Report Card
challenge and get an "A" - an outstanding grade - I'll pay you
$100. Go ahead, make my day.
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