YOUR INVESTMENT PLAN EVALUATION
Your investment plan is inadequate if it doesn’t satisfactorily answer all of these questions!
Where are you now?
- How much do you pay annually in direct and hidden investing costs?
- What risks are you taking (is that too little or too much)?
- What services do you really want and need?
- Are you getting your money’s worth (i.e., is what you receive worth the cost)?
- Is your advisor a fiduciary? If not, are you aware of all conflicts of interest?
Where are you going?
- Why are you investing? (What are you trying to accomplish? What is your objective?)
- How much capital must you accumulate to realize your financial objective?
- What capital resources do you have available (now and in the future) to dedicate solely to this investment objective?
- How much time do you have to meet your objective?
- What rate of return do you expect from your investments? Is that realistic?
- Are your goals realistic considering the available capital and time?
How will you get there?
- Is your investment plan written, realistic, and customized to your unique situation?
- Does your plan include an Investment Policy Statement that describes and quantifies your goals, identifies the appropriate level of risk, and explains your investment strategy?
- What asset classes should you use and how much should you allocate to each one?
- When should you rebalance your asset mix?
- Have you and your advisor defined your separate roles and responsibilities?
- Are you confident enough in your plan and how it works to be able to stay the course during severe market conditions?
Are you getting there?
- How often do you thoroughly review your portfolio? Is that enough?
- What was your rate of return last year? Does that include investment fees and expenses?
- How did your rate of return compare to the market as a whole?
- How do you measure success? What benchmarks do you use to judge your progress?
- Are you on track to meet your goals?
- How have recent events in the stock and bond markets affected your planning?