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Three Easy Ways to Get the Most out of Your Portfolio

Three Easy Ways to Get the Most out of Your Portfolio

1. Minimize your Trading Commissions

Your trading commissions refer to the transaction costs charged when you make a trade. These costs can add up quickly and so to minimize them will result in significant savings to your portfolio. So how do you find savings across these costs? Speak with your advisor to see if there is a set fee or percentage that you could pay regardless of the number of trades that you put through. If you are using an online broker to hold your account and process your trades, then see if there could be a better priced one by using our Instant Savings Tool. The catch with online brokers is of course is that you won’t have an advisor monitoring your portfolio when you use discount brokerage accounts.

2. Save on your Investment Management Fees

Investment Management Fees come in many shapes and sizes. They could be expressed as MERs as in the case of Mutual funds and ETFs, or as Management Fees in the case of an Advisor’s Managed Account, or simply through trade commissions paid every time you make a transaction. If you are investing in mutual funds and ETFs, try using our Instant Savings Service to find potentially cheaper and potentially better performing mutual funds and ETFs. We have built this platform to allow you to search for funds which are in similar investment categories as your current fund, but which have had a higher performance, lower risk, solid ranking by Lipper, and most importantly a lower annual fee. We allow you to see instantly how much you could be paying on your current fund and how much you could save using the potential alternative funds. Enjoy your new found monies!

3. Focus on your Portfolio’s Asset Allocation

Whether you choose to try and beat the market with an active mutual fund or just want to replicate the market’s returns using an ETF, focusing on your asset allocation will save you both time and money. Setting and sticking to a prearranged asset allocation based on your comfort level is key to prudent portfolio management. Asset allocation refers to deciding how much to invest in fixed income (cash and bonds) versus equities. Essentially, the more safe you want to be, the more in fixed income your portfolio should be invested and vice versa. Once you’ve gone through the various potential allocations and have chosen the one which you are most comfortable with, have your portfolio monitored to stay within an acceptable range of say 5% of each allocation. Once an allocation goes beyond this limit, have the investments in the over allocation state reduced and the investments in the under allocation state increased. By ensuring this type of monitoring and rebalancing takes place, you will effectively be setting up your portfolio to buy when prices are cheap and sell when prices are high. This type of preset rebalancing ends up saving your portfolio significant monies. And how do you arrive at the right asset allocation? Ask your advisor to show you how portfolios of various asset allocations performed over the past 10, 20, and 30 years. This way you can see just how well they performed and also how poorly they performed. Before deciding on your asset allocation, you need to know statistics such as: what has the worst 5 year period with a certain allocation as well as the best 5 year period. Bear in mind that most mutual funds and ETFs don’t have 10, 20 , or 30 year track records. For this reason, have your advisor use the major market index returns as indicators of returns and risk. And if you’re having difficulty getting these numbers, not to worry as our portfolio analysis tool, which is coming very soon, will provide you with this information instantly!