Postmodern Portfolios

What’s the best way to hit your investment target?

Photo: Eddi Laumans. Source: Wikipedia

There’s a school of thought that says people are basically the same: apart from our individual quirks, we all want a little income and a little growth from our investments. So we should combine a balance of stock and bond funds together to have a low-cost, broadly-diversified portfolio.

There’s a lot to be said for this: it’s cheap and it gets people started on the investment process. And people usually get more conservative with their money as they age, so reducing risk by increasing the bond allocation isn’t unreasonable.

But this ignores some important issues. People aren’t all alike. Once you scratch under the surface, we all have very different hopes, dreams, fears, and constraints. And everyone brings a different set of resources to the table: financial, emotional, intellectual, and so on. Using a “cookie-cutter” approach with mutual funds and investment models neglects our unique assets.

Building an investment portfolio is a lot like building a house. We all need shelter, but no two living spaces are alike. Every structure may all have a foundation, walls, and a roof, but the similarities end there. Homes in southern California are very different from dwellings in New England, which is different than the Midwest. And like our homes, our investments need to fit our current lifestyle and future plans. It needs to use the materials at hand to provide resources for the future.

Investing, like all of life, is complex and multifaceted. Managing our money is as much an art as it is a science. Some generalizations may be useful, but at its core all finance is really personal finance

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2017-07-17T12:21:37+00:00 November 28th, 2016|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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