How’s Your Portfolio Doing?

RiskalyzeI’m not a huge sports fan, although sometimes I wish I were.  If asked how I thought the Carolina Panthers defensive line was looking this year my honest answer would be that I have no idea.  But if I were asked that same question in a place where I felt like I really wanted to fit in, I might awkwardly blurt out something like, “I’d say strong…to…quite strong.” That’s probably similar to what many people would say when asked about how their portfolio was doing.  Much like Ben Stiller in this clip from the 90’s comedy Meet the Parents.

A few weeks ago, Jared wrote about the importance of having an intelligent, evidence-based investment process. How having one can not only create more wealth for you and your family over the long haul but also make it much more likely that you’ll avoid making a poor emotional decision during the (sometimes rather large) ups and downs the market inevitably experiences.

Two of the key takeaways from Jared’s piece were to 1) Be educated on just what investments are in your portfolio, why they are there and how they might perform in different types of markets and 2) Seek to take an appropriate amount of risk.

At Beacon, we use a tool called Riskalyze that helps us get a good understanding of how much risk our clients might be comfortable taking.  It also allows us to model different portfolios to learn how they would have performed during past times of market volatility and how they might perform in future scenarios.  We’ve found the Riskalyze process to be one of the best ways for investors to address the need to understand themselves and their portfolios.  It’s well worth investing a few minutes of your time to check it out.

So, whether you’re a client or not, if you’re interested in walking through the Riskalyze process, there are two ways you can proceed:

  • If you’re just interested in getting an idea of what your risk tolerance is, you can take the Riskalyze quiz by clicking here. It will ask you for your name and email address so we can send you the results.  We promise not to use your information for any other purpose.
  • If you’d like to get an idea of how your current portfolio would have behaved during the financial crisis or the last bear market we’ll need some of the details about your portfolio.  Give us a call or send us an email to get started.

I would suggest taking a few minutes to do both. The stock market has been very well-behaved for a long time now, and I don’t know when that might change.  I do know, however, that the best time to address market volatility is before it happens. Wouldn’t you want to know ahead of time if your Risk Number is a 49 but your portfolio’s Risk Number is a 78 (hint: a higher Risk Number equals more risk)?

It’s important to remember that past performance does not guarantee future results, and we want to ensure that we’re always looking forward and not fighting the last war. But we’ve found that a review of your portfolio’s behavior in past market corrections, in both percentage and dollar terms, is a great starting point for a conversation about whether or not that portfolio is appropriate going forward.


Geoff Hall, CFP®
[email protected]

My wife, Crystal, and I have been married for 11 years and have two kids, Cooper (10) and Rhodes (8.) When I’m not spending time with them you might find me downtown serving at our church, pushing my limits during a mountain bike ride or having coffee with a friend in the Five Points area. I've been a financial advisor for 29 years and I'm thankful for the privilege of shepherding my family of clients through the ups and down of the markets, and of life for that matter.