Investors do not monitor their portfolio adequately. Rare is the investor who can place their hands on the Internal Rate of Return (IRR) of their portfolio. An even smaller percentage of investors know how well their portfolio is performing with respect to an appropriate benchmark. The third measure, risk of portfolio, reduces the percentage to nearly zero. In other words, few investors accurately measure all three factors: portfolio IRR, benchmark IRR, and portfolio risk. Even professional money managers will not monitor all three metrics for their customers. If an investor monitors these three metrics carefully and takes a passive approach to investing, there is no need for professional management. Save those fees and have more money working in your portfolio.
If you are using one of the momentum models, it is essential to monitor the performance of the portfolio to see if you are gaining or losing ground with respect to an acceptable benchmark. Use the TLH Spreadsheet to correct mistake #10.
ITA Wealth Management is here to help investors avoid these ten (10) mistakes.