What Investment Return Did You Get Last Year?

If I asked any physician what his medical malpractice premium is, he'd be able to tell me down to the penny. If you can't do that, then you might want to find out that information, don't you think?

And think about all of the patient care related activities we keep in our heads:

  • Lab values
  • Operating room procedures
  • Treatment protocols
  • Doses of medications

But what if I asked you "What was your investment portfolio's rate of return last year?" would you know the answer to that question?

I doubt it.

You may think you know the answer, but I bet you're not looking at it the way you should. And if you've hired a financial advisor, even he might not show you. Even if he does, chances are that the rate of return he quotes you may not really be your overall portfolio's rate of return.

Let me explain.

To really get a sense of what your portfolio's return was last year, here is what you should know and what your financial advisor should be telling you:

1. The return of every individual investment you own

This means you need to know the return of every indvidual stock, individual bond, mutual fund, and exchange traded fund (ETF) you own.

2. The return of each specific account

This is a big mistake I see physician investors and their financial advisors making. You make the mental mistake of focusing only on the accounts that generated good returns and ignore the accounts that generated a poor return.

Similarly, if you're married and you're looking at only your accounts, you're missing your spouse's accounts and not factoring in your spouse's rate of return.

3. The return of the entire portfolio

That gets to the most important point. It's your overall portfolio return that matters the most. This includes ALL of your accounts across both you and your spouse. Why? Because you'll likely be withdrawing money from all of these accounts when you retire so the portfolio return is more important than each account or individual holding's return.

Here's a common situation my clients face:

Husband has a 401k, traditional IRA, Roth IRA. Wife has a 401k, 403b, traditionanl IRA, and Roth IRA. They also have a joint taxable account. Total of 8 different investment accounts.

I bet if you're a married physician you probably have something similar.

If that's the case and  you don't know your overall portfolio's return, then you seriously have to queston whether you have an investment plan to begin with.

And if you've hired a financial advisor who isn't managing and advising your entire portfolio and supervising it on an ongoing basis, then it's possible that advisor doesn't have an investment plan either.

That's sort of like a physician who sees a patient with multiple compalints but only addresses one of them and ignores the rest. You wouldn't do that to patients would you?

Then why would you hire a financial advisor who doesn't look at the big picture for your investments, advises and manages all of them, and shows you the entire portfolio return?

So whether you've got an advisor or not, figure out your portfolio's rate of return, each account's rate of return, and each holding's rate of return.

Wanna know how I can help you do this and at the same create and implement a long term investment plan for you?

Then set up your 30 minute second opinion consultation by clicking here:

Second Opinion Consulation