What do you compare your portfolio to?

If you have an investment portfolio, it is prudent to review this regularly to ensure it remains appropriate. Part of this review would likely involve a comparison of the portfolio to something, the question then becomes what do you compare it to?

With my clients I generally start with their financial plan as the benchmark, i.e. is the portfolio generating the returns needed to help them achieve/maintain their desired lifestyle without fear they will run out of money. For me this is very important as my experience is having peace of mind around money is an objective whereas trying to obtain a specific return above a specific benchmark is not.

Focusing on retirement income, the main issue is ensuring that the purchasing power of money is maintained/increased so it is then a sensible idea to compare the portfolio to inflation (can I buy at least the same in the future with my money or hopefully more?). This is why we invest – to provide financial security for our future selves.

After this, it is sensible to compare the portfolio to something similar to see if it remains suitable compared to its peers or whether something alternative could be considered. Here the firm’s Investment Philosophy is important, in the words of David Booth from Dimensional Fund Advisors:   

"The important thing about an investment philosophy is that you have to have one you can stick with."

Therefore, in summary, there are many ways to compare a portfolio but starting with the most relevant and client specific (i.e. the financial plan) I believe to be the most meaningful approach.

Warm Regards

Neil

 

This article should not be considered investment advice or an offer of any product for sale, it contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular, strategy or investment product. Information contained has been obtained from sources believed to be reliable, but is not guaranteed. Past performance is not an indicator of future results.

Financial Planning
Financial Advice
Mortgage Services
Testimonials
Margaret, Taunton
The best thing about a visit to my financial advisor,Neil Rossiter, is the feeling that all my assets are in safe and capable hands and I don't need to worry about anything! My annual meeting was well organised, well informed and really assured me that my money was well looked after. No query was too simple and the computer software showed every scenario and projected into the future.  Neil spells everything out and explains the good and not so good possible outcomes. He listens and then offers clear and honest advice. I am so glad that I chose his company to manage my money allowing me to have confidence in my financial future.  
Avril, Devon
I am a pensioner and when I first saw Neil I was extremely worried about how to keep my savings safe but also have a good return from my investments, Neil was very kind and explained everything in detail to me for the best way to go forward with my money. I have now been with him for three years and my portfolio has grown and I feel confident with all the advice he has given and the investments that he has done for me, I know that if I have any worries I can contact him and he will always get back to me immediately, I now feel confident with my investments and all the advice that Neil has given me and I am enjoying my retirement. I am extremely satisfied with everything Neil has done.
William, Taunton
I was coming up to retirement and required advice on investments and savings for my future. He helped in providing full details on where to put my savings and investments for when I come to retire, and helped me in providing a proper household budget plan and to show me the best places to invest for my future. I have just retired and with the help Neil Rossiter has provided has given me peace of mind and a secure financial future.Everything was done to an excellent standard.
Richard, Somerset
Neil has helped me complete the due diligence associated with being the Power of Attorney for my relatives, and has in the course of the advice and subsequent action that I have taken, enabled me to expand my knowledge of financial products.  He clearly understood the circumstances that facilitated the introduction, and was very thorough in researching the current financial state and my needs as PoA representing the estates of my relatives, the commercial proposition was also very competitive. Throughout the process I anticipated that we would follow a certain route in respect of managing the fund available, however, he has helped me and guided me towards selecting the appropriate plan of action through the use of some very clear and simplistic financial modelling, thereby allowing the layman to clearly understand the risks and benefits associated with the various options that are open to manage a fund. His professional and friendly nature and his willingness to always be available to answer questions were very welcome when digesting the comprehensive financial plan that he prepared for me. This was my 1st commercial interaction with a financial advisor and I am relieved that through Neil's professionalism it was also a rewarding experience. As this was my 1st interaction with a Financial advisor, I am not sure that Neil could have done anything better, I am completely satisfied with the interaction, the result and the cost of the advice, and will certainly have no hesitation in using Neil in the future, as needs arise.
Angela Healy, Teignmouth
I have been a client of Neil at Blackdown Financial for some years now, following a recommendation from my son, who is also Neil's client. Neil and his team have always been very supportive and trustworthy and I particularly appreciate Neil's ability to explain matters clearly and calmly. The financial plans we have drawn up together have been invaluable – I retired earlier than I thought I could as a result of looking at my financial situation as a whole, rather than a series of products like pensions, investments etc.    
Graham, Somerset
Simon explained all the for's and against of investments plus the cost of administration/initial set up. Obtained an overall view of my risk element before recommending a product.  
Donna Noll
Simon, is so easy to talk with and he ensures you understand completely his suggestions to help you create more wealth! I bought my buy to let property without stress and i can honestly say that was down to Simons advice, help, support and knowledge. I could not recommend Simon highly enough
Nick Girone- Maddocks, Gibbins Richards Estate Agents, Wellington
Many thanks to David Blair and all at Blackdown Financial for their inventive and pro-active assistance in a recent tricky transaction. With David Blair the ball is kept FIRMLY in the air, Thank You!
Euan and Jane Barker, Wellington
“We have been clients of Blackdown Financial for over 20 years.  During that time we have found them always approachable and willing to take the time to understand our situation, viewpoint on risk and what we were looking to do for short, medium and long term financial planning.  They have then advised us on appropriate decisions and investments.  This advice always appears well considered and accurate, and we have generally followed it on that basis, almost always with good results (so far!). The feedback and ideas presented by Blackdown always have some relevance to our situation.  If we are uncomfortable with some or feel them too risky they have never pushed them hard at us so decisions on which direction/proposals to follow always feel well suited to us. At times some of the advice given by Blackdown is clearly not going to benefit them in the short-medium term which has led us to build a better level of trust in them.   We hope to continue using Blackdown over the next 10-15 years as we continue to plan towards retirement.“
Katie, Taunton
My husband and I were looking for a help to buy mortgage so we could buy our first home. David talked us through all options available to us, including some we hadn't thought of. He helped to explain the house buying and mortgage process and was very quick and thorough in answering any questions we had. We felt confident in his recommendations and advice and believe the process was smooth and stress free because of this. We would not hesitate to recommend him and will be back again when we come to remortgage. We have been in our home for 8 months and are very happy.