Questions For Your Financial Advisor

Sunday, August 24, 2008 | 08:30 AM

A good list for those of you who delegate your investing to an outside adviser.

Consider asking these questions of your advisor during your quarterly and/or 2008 year-end review:

1. What were your adviser's expectations for the stock market's returns in 2008 and how did these expectations compare to the actual results?

2. How did your investment performance compare to that of the major indices? In what areas did you outperform, and in what areas did you underperform -- and why?

3. What was your adviser's economic and credit expectations, and how did these expectations compare to the actual events? Where and why were his assumptions wrong?

4. Did your adviser change his strategy as economic and financial events changed? If he didn't, why not?

5. Did you experience outsized individual stock or large specific industry or sector share price losses? Did your adviser institute a discipline to stop losses, or were your losses allowed to compound? Did your adviser "double down" on poor investments?

6. Ask your adviser whether he "eats is own cooking" -- that is, did he invest along with you in the same investments, and are both of your interests aligned?

Hat tip: Doug Kass

Sunday, August 24, 2008 | 08:30 AM | Permalink | Comments (22) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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You forgot to ask whether the advisor has purchased a larger yacht recently...

Posted by: leftback | Aug 24, 2008 9:33:53 AM

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