Auditing my investment decisions

I like to audit my investment decisions. This is a useful step in my process, which can help in growing as an investor.

My goal with this newsletter is to help you become a better investor. This means that you should get comfortable either designing your own process to follow or understand your limitations, and get someone else to help you with this process. This could mean to either follow someone else for inspiration, use a financial professional, or use an ETF/Fund with a low cost.

There are various trade-offs involved with any decision involved. I personally enjoy building the portfolio, one company at a time, and having control over what goes in, what goes out, the portfolio weights, holding periods, and tax management. Basically I can place higher yielding securities in a tax-deferred account, and lower yielding securities in a taxable account. I have lower fees and turnovers than the cheapest least active funds out there. Basically, I’ve probably paid less than $30 in total commissions since the launch of this now 6 figure portfolio in 2018. Lower turnover can provide good results in the future.

I do spend time reviewing, analyzing and monitoring companies however. This time has added value to me in many immeasurable ways. Example – finding employment or being able to connect to other, like-minded individuals.

But for others, reviewing companies is a chore and a nuisance. Many folks do not want to spend much time per year monitoring portfolios, deciding which investment to buy or sell, or doing anything. For those folks, using a fund may be the best course of action. Of course, the million dollar question is – which fund should I choose. Choosing the right fund, with the right strategy, and making sure they stick to it while you enjoy your life is not an easy task. Ultimately, it comes down to choosing a strategy you are comfortable with. To me, I find it hard to delegate everything to someone else. But you may be comfortable yourself. If you want to avoid picking stocks yourself, you have to select a fund that picks them for you. Either way, finding the right fund is an exercise in stock picking itself. Oh the irony.

There is even another group, which need a lot of help choosing the right funds, hence they use a financial advisor. These financial advisors come in many shapes and forms. But in general, you probably want a licensed one, with a professional certification, which is hopefully a fiduciary (in theory this means keeping your client interests first, ahead of his), and who doesn’t charge a lot of fees. But most importantly, someone who is a good human, and won’t take advantage of you and your family when you are at your most vulnerable. I am not sure who to find those individuals, because the best ones are very hard to find and they are usually so overbooked, I may not even be qualified to get on their waiting list. But new ones enter the profession every day, so perhaps Google if this is your course of action.

Just wanted to state that the person who cares the most about your money is yourself. So please make sure you are working to educate yourself on money matters, so you can make the best decisions, whether you DIY portfolio management, use ETFs/Funds or use Advisors.