Is someone “managing” your money and your account holds 40-50 or more items? You think – ‘good…many investments…some names I recognize… diversification…safety…should do well.’
The statements arrive monthly and you look at them. A picture does not emerge. You see little progress. You can not figure out “performance.”
Your spouse or friend has accounts with another advisor, and shares information with you. You read the total account value each month and see the account increasing faster than yours. Surprisingly, those accounts do not hold as many investments and the statements are easier to read.
What is the difference? Chances are…you are the owner of a robo managed account. Your advisor had no responsibility for choosing the investments, only the “pool” that indicated a risk level thought appropriate for you.
A robo investment is one “mutual fund” or a “pool of money.” It follows a set of ideas or principles set up by smart people. If you are age 50, you should only have “x” dollars in equities and by age 70, that number should have changed. And so on. But you know you are quite different from other people aged 50!
Your friend owns accounts chosen by an advisor who can explain why he has chosen those particular investments. He may be using mutual funds; confidence in the managers and their historical ability to outperform indexes over long periods of time may have a bearing on choices.
Keeping it Simple Might Be Better. Give us a call!
Next: What about risk?