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Quarterly Performance Reporting To Clients

June 27, 2017

Financial advisors have offered portfolio performance reports quarterly for decades. The practice began when brokerage statements were considered undecipherable. The idea was to view your performance against the markets.

The problem is your portfolio isn’t the market. Newscasts frequently report the result of the Dow Jones Industrial Average but it only holds 30 stocks. Even selecting other indexes doesn’t exactly mirror your own portfolio.

Morningstar, an investment research and software company offers software advisors use matching mutual funds to the benchmarks against which they measure performance. This is a method that comes close to looking at your personal portfolio versus an aggregated benchmark.

However, if you ask a financial advisor whether viewing your portfolio quarterly makes sense, most will say no. Financial Connections believes investments should be for the long-term. We do not recommend investing unless you have a minimum 5-year time horizon. What occurs in-between is considered “white noise.”

Your investments should be based on your goals identified through your financial plan. Questions such as:

  • What is this money for?
  • When do I need it?
  • How long does it need to last?

Are just a few of the questions that are part of a financial plan. From there, a portfolio is designed.

In this technological world, we, like many others, provide access to your information daily. We don’t think it is in a client’s best interest to view daily outcomes but it is human nature to be curious. It is important to remember the activity is on paper, and gains or losses are not realized until you sell.


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