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Portfolio Maintenance 101: Seven Critical Questions

johnNjohnN
in Other Investing
http://funds-newsletter.com/sept20-newsletter/sept20.htm

Portfolio Maintenance 101: Seven Critical Questions
By Tom Madell

Many people have contacted me for help in arriving at and maintaining an appropriate fund portfolio during the last several months. Each investor, of course, has a different set of circumstances which means that merely recommending the identical "cookie cutter" portfolio for everyone doesn't make sense. Compounding the difficulty is that we are now operating under a situation, namely the coronavirus, that has never been experienced before, and for which there are still far too many questions than answers.





Dr Madell asks important/ intuitive questions regarding management of your portfolio that you consider doing frequently. His readings are interesting to me. Anyone have experience with him free-reviews and feedback of your portfolio?. Enjoy

Comments

  • Old_Skeet
    edited September 2020
    Hi @ johnN,

    Thanks for posting Dr. Madell's newsletter. I most always enjoy reading what he has to write.

    Now, the Professor has gone from writing a newsletter to also conducting free review of investor portfolios.

    Wonder why this is so? Perhaps, he is looking for investment ideas and maybe he is also learning from seeing what others are doing?

    It will be interesting to see what he writes in his newsletter going forward.

    Old_Skeet

  • hank
    edited September 2020
    “Investor: I am 69 years old and consider myself a moderate risk investor. About 80% of my portfolio is in stocks/stock funds, 17% is in bonds, and 3% in cash.”

    Hmmm .... Suppose some of this depends on what specific stock funds are owned. But, by what standard is 80% in equities considered a moderate risk allocation?

    Interestingly, Mandell’s main recommendations are to go to a 65/35 portfolio and try to eliminate sector duplication in the portfolio by eliminating overlapping funds. Geez - I hope he doesn’t change people money for such lame advice.
  • Old_Skeet
    edited September 2020
    I am thinking, for me, being 70 to 80 percent equity would be aggressive.
  • johnNjohnN
    @40 50% probably best...have changed mama portfolio based in many MFOers here @40s% stocks and rest in fixed incomes cash 16 months ago, never been happier
  • tmadell
    Why am I offering to do free reviews of investors' portfolios? Of course, everything about my site is free. But the reason is this: many of my readers are pretty uncertain as to how they should proceed. They need personal advice but don't perhaps feel comfortable getting it from a paid advisor. Many have learned to trust me down through the years from reading my Newsletter. This is the best way I can help people and to give back to people from all I have learned over a very long period of studying mutual funds.
  • hank
    edited September 2020
    @tmadell,

    Thanks. I didn’t realize yours was a free site. I also suspect the question you were addressing might have been abbreviated in print either to protect the identity of the investor or for journalistic reasons. I’ll assume you were aware in addressing the questioner of more tangibles than revealed in the published version posted here (things like other sources of income, other assets owned, health, marital status, goals, etc.) The 65/35 might well be appropriate for the investor depending on the larger picture.

    There’s a school of thought today that with interest rates so low, the traditional equity / bond allocation may be ill-suited for many investors. Specifically, many of us are / have been looking at including some form of “alternative” investments in the blend to replace some of that traditional bond exposure. Price’s TMSRX has lately received a good deal of favorable mention in that regard. But there’s a whole universe of funds that attempt to circumvent (or at least supplement) that traditional bond / equity allocation. I was a bit surprised that wasn’t part of your advice.

    We’ve kicked around here a lot the issue of “overlapping” funds that have similar goals and hold the same types of securities. I know I’m in the minority here on that point and may rub you the wrong way as well. Here’s my bottom line: A good fund - is a good fund - is a good fund. If I owned a dozen funds all as good as PRWCX has been for decades now, my results would be the same as if I’d only owned only one such fund. The duplication didn’t affect my long-term results in either direction. So, aside from the complications of tracking everything, I’m not as concerned as you (and many here) about duplication - although I do understand the advice is offered as an expedient towards a more diversified portfolio (also perfectly logical).
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