qanda

Q: Should I Follow Your Model Portfolios?

Q: Should I directly follow one of your model portfolios? Or do you have a personalized suggestion for me different from your model portfolios? (This question came with a list of Vanguard funds that were either not on my recommended list or with different percentages than I recommend.) 

A:  When I was an investment advisor, I was able to give personal advice based on an investors need for return, risk tolerance and other variables, including their investment biases. I even gave free advice on the portion our firm didn’tmanaged.  Also, I gave advice to the children of my clients on what to do with their 401k(s), without compensation. Since I am no longer a licensed investment advisor I cannot give personal investment advice to anyone but my closest friends. However, I can give general recommendations that are made without the personal information necessary to do the work of an investment advisor. 

I find most investors get their investment ideas from dozens of sources and then construct a portfolio based on the best they have learned from all the sources. In essence these investors end up with a portfolio that none of the sources would agree is the best they know. My portfolios are the best I know given that the investor understands the likely risk and return of each combination of asset classes, and I work hard to make the risk and return very clear. In other words, I have given you the best I know without taking the responsibility of being your personal investment advisor.