Some Advice for the Unsophisticated Investor

The Way to Better Investing

Not all of us know how to be an investor. We don’t know what we don’t know…and that puts us at a disadvantage.


If you are an unsophisticated investor…if you want to trust your advisor but don’t know how to manage that relationship…if you’re new to investing or have decided that it’s time to be more active…then take a look here at these three questions:

1.) What percentage of my assets is invested in stocks and what percentage is in bonds?

This is the most important decision you will make. If you own a variety of mutual funds, make sure the advisor “looks through” the mutual funds to get at this important number.

2.) How am I doing?

The answer is “dollar-weighted results.” The math is easy. How much did you start with? How much have you added or taken out? How much do you have today? If you know what you have today, you can subtract what you started with. Then you add back any money you took out or subtract any money you added. Then you will know how you are doing.

3.) How much is this costing me?

Be careful how you ask this question. Many advisors will tell you only what they are charging you, not what the middlemen may be charging. So ask your advisor for your total costs, including his fees. Make sure he reports this to you every year.

If you haven’t been active in managing your financial future, today is the day to start! It takes good habits and the right people to set you up for success…but it starts with the decision to be a financial leader in your life.

To find out more about Fred Martin or The Objective Measure Conference, where we are raising the standards for active financial leadership, click here.