Courtney Myers Blog | Looking to Rate and Assess Your Portfolio? Start Here | Talkmarkets

Looking to Rate and Assess Your Portfolio? Start Here

Date: Monday, August 27, 2018 10:36 PM EDT

A balanced and well-performing investment portfolio is an aim for any savvy investor. At the end of the day, regardless of how our funds are divvied up between stocks, bonds and other entities, we want to ensure that we have struck the right balance. Yet, how confident are you that your portfolio has the right amount of risk and is generating a sufficient amount of income? If you’re still struggling with rating your portfolio’s performance, keep reading. Today, we’re taking a look at five ways to analyze your income-focused portfolio to make sure your money is working for you like it should be.

1. Understand the research materials.

If you’re an investor, you should be receiving fund materials on a routine basis detailing the performance of your actively managed fund. Usually known as a prospectus with accompanying documentation included, this data can be dense to read, but it can provide a wealth of information for those dedicated enough to absorb it. You can also track your index online to keep pace with more timely updates.

Monitor the prospectus to see how your fund is doing. Is the trend generally upward or have you noticed a gradual decline? Partner with your financial advisor to understand the appropriate benchmarks you should be looking for and comparing the assets against.

2. Compare against target-date funds.

Put simply, a target-date fund is a portfolio designed with a strategic mix of stocks and bonds designed to be ideal for someone with a set retirement date. Traditionally, the mix shifts gradually from stocks to more risk-averse bonds as the date nears.

If you can’t pinpoint a benchmark for your retirement portfolio as a larger entity, it can be helpful to compare your current setup against a target-date setup designed with a similar asset mix as yours. This way, you can see if you’re at least on the right path toward meeting your earning potential. You can also gauge how much you could stand to earn by slowly shifting your asset mix as well to mimic the target-date fund pattern.

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