MoneyDo: Know what you own.


One of the key tenets of Annex Wealth Management’s investment philosophy is a balanced portfolio. If you’re trying to manage your own portfolio, the only way you can understand if your portfolio is balanced is to know what you own.

Annex Wealth Management’s Chief Investment Officer Derek Felske suggests you “know what you own” by performing rudimentary research into your investments.

Take a look at your statement or visit the website of your holdings. Challenge and understand what you own. Ask questions. Does your financial philosophy include investments in the international or emerging markets? Do you own a specific kind of bond fund? Do you hold investments that will better cope with inflation?

  • Many investors believe that if he or she invests in a mutual fund, the fund’s manager will work to make the fund’s portfolio balanced on the investor’s behalf.
    • The fund’s manager likely has different goals than you.
  • Sometimes investors employ that same philosophy by “diversifying” and investing in a number of mutual funds.

Mutual fund managers may not have the same diversification goals you do; the chances that your personal goals are reflected become increasingly unlikely as you invest in multiple mutual funds.

  • Take a look at a mutual fund’s top ten holdings. Do they represent the balanced diversity across sectors that match the goals of your financial plan?
  • If you own multiple mutual funds, do you see the same holding or the same types of holdings in each one?
  • If you see that you are “overweighted” in a sector or a specific holding, it may be time to reevaluate and possibly reallocate your portfolio.
  • Even if you’re not invested in mutual funds, review and ask questions about your top ten holdings. Are you weighted towards a specific sector or type of investment?

By knowing what you own and considering how it aligns with your financial plan, you can strive for more diversity and a balanced portfolio.

*If this exercise is more work than you can handle, and/or you need a financial plan to help guide and inform your portfolio allocation, consider sitting down with us at Annex Wealth Management, where we perform a “portfolio x-ray” as part of our portfolio review to understand your current holdings.