QUESTION

Imagine you have been tasked with evaluating a portfolio manager. How would you evaluate their performance? Share specific categories you would assess, what you would expect to see and any areas in which you allow leeway.

MY ANSWER

Outside of textbook with calculate time-weighted returns and dollar-weighted returns, they are many other way to selecting and evaluating portfolio manager who client hope to find an active in many forms of communication will allow a client to gain a more detailed and complete understanding of the managers philosophy and personality to determine if the client will feel comfortable in the relationship.

You probably hear a lot on our local radio talk show hosting talk about their financial plan and strategy that leading financial workshops and seminars demonstrate that they have a firm, real-world understanding of investing, and would hopefully be able to manage your investments in a professional successful manner.

Here are some questions we should ask the qualified managers are should be able to answers:

How often will you perform an efficient frontier analysis of my portfolio?

What do you envision the bata and expected return for my portfolio?

What was the worst performing stock you purchased for your clients

What did you do about it

How do you remedy the situation?

How have you changed your strategies based on this occurrence?

If I am not satisfied what are some exit routes?

What are your short and long term views of currency fluctuation relating to my personal portfolio?

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