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Sep 18, 2015

How Should My Investment Portfolio Be Performing?


Part 1/3 in the "How's My Portfolio Doing?" series.

The series will cover:

       1. How Should My Investment Portfolio Be Performing?

                    Including a Case study with a video walk-through of the excel spreadsheet

       2. How Does My Portfolio Match Up?

                     Including a look into Return, Risk, and Cost

       3. How Do I Fix My Portfolio?

 ASK ABOUT: free portfolio allocation check, first 10 requests are free!

Check us out on:  TrustedRegina.com Eureka Investor Guidance Kathy Waite

Part 1/3 in the "How's My Portfolio Doing?" series

 

The series will cover:

       1. How Should My Investment Portfolio Be Performing?

                    Including a Case study with a video walk-through of the excel spreadsheet

       2. How Does My Portfolio Match Up?

                     Including a look into Return, Risk, and Cost

       3. How Do I Fix My Portfolio?

 ASK ABOUT: free portfolio allocation check, first 10 requests are free!

 

To determine how your portfolio SHOULD be doing you need 2 things:

-       Your portfolio asset allocation

-       Eureka’s “How Is My Portfolio Doing?” excel sheet

Using these two things we will identify a benchmark for your portfolio using indexes.

 

Finding Your Asset Allocation: Believe it or not, finding your allocation will likely be the trickiest part of this adventure. Your asset allocation is the mix of investments that make up your portfolio. For example, 50% Canadian stocks, 30% Canadian bonds, 15% U.S. stocks, and 5% cash. Some of you may be lucky and have it printed right on your statements. Here are a two examples:

 

 

If you are one of the lucky ones with the allocation given to you, you can go ahead and open the excel sheet. Once opened follow the instructions. Click the image below to download excel sheet.

If you have a numerous individual securities (i.e. stocks & bonds) you may have to calculate your allocation yourself if it's not on your statement. Use Eureka’s excel sheet to work this out (2nd sheet). If you have more than 30 positions in one of the categories on the sheet let us know at info@eurekainvestorguidance.ca and we will extend the sheet for you. Click image below to download excel sheet.

 

If your statement does not break out the allocation but simply lists a fund like the statement in the image below, you have to go to the fund companies website and search for the fund. The allocation will be there somewhere, or you can find it with google search. Sometimes fund companies change their fund names without telling you so this could be tricky.

 

TOTAL RETURNS

We should explain TOTAL RETURNS before you run off and use the spreadsheet. 

Total Returns are the total increase in value over a period from an investment. Total returns include dividends and interest paid out from the investment plus the appreciation of the investment itself.    

TOTAL RETURN = investment appreciation + dividends or interest

In comparison, price level returns—which you see daily in the newspaper, on the business news, or online—are only the appreciation of the investment. Does NOT include the dividends. These are used day to day as the Total return data is only available at the end of the day once the dividends for that day have landed in accounts.

For example: ABC corp stock increases $5 over 1-year, and paid out a $1.50 dividend too. 

TOTAL RETURN = $5 + $1.50    = $6.50                     PRICE LEVEL RETURN = $5

                                

IF YOU DO NOT USE TOTAL RETURNS YOU ARE NOT GETTING A TRUE REPRESENTATION OF HOW YOUR PORTFOLIO IS DOING!!! Beware of those not using Total returns; usually it’s either in deceit or ignorance.

 

THINGS TO BE AWARE OF!

- Including bond funds in the equity allocation on statements. Because the bond funds are "listed" on the market the statements are sometimes not smart enough to classify the funds correctly.

  •  If you think this might be an issue for you. Touch base and we can investigate for you OR you can go find the mutual fund allocations and input them into the “Not given allocation” excel sheet above.

- Fund companies like to change the names of poorly performing funds.

  •  This does a reset of past performance figures and confuses investors.

- Not using Total returns

 

Goodluck! Let us know if you have any questions and dont forget, FIRST 10 portfolio allocations checks are free!

See you in part 2 of this series where we will look at comparing your portfolio to its benchmark.

Check us out on:  TrustedRegina.com Eureka Investor Guidance Kathy Waite