Help Managing Your Portfolio

Many people want help managing their investments. A 2015 Gallup poll found that 62% of U.S. investors preferred to work either entirely or mostly with a financial advisor and another 26% wanted access to an advisor.

But while many people want help managing their investments they often find that they don’t meet the high minimum investments of many top managers. Fortunately, there are other ways that you can have a portfolio of funds created and managed for you for much lower minimums.

One option are robo-advisors, which seek to automate the work of investment advisors. If you use a robo-advisor, you typically fill out an online questionnaire about your age, income, and goals, and the robo-advisor suggests a portfolio for you, usually a portfolio of exchange-traded funds (ETFs) that has a low minimum investment.

At first glance it may appear to be an efficient way to get professional help, but be aware of  limitations. Most robo-advisor portfolios invest only in exchange-traded funds (ETFs); they don’t have the opportunity to invest in actively managed funds. And most importantly, these portfolios often have static allocations to different areas of the market and cash, basically covering all bases which can work against you at times.

Holding fixed allocations to various asset classes and sectors means you own both good and poor performers in hopes of it all balancing out in the end. For example, some robo-advisor portfolios have exposure to emerging markets, which have been out of favor for the last few years. 

But markets change over time.  Different areas of the market come in and out of favor, and these cycles tend to last years.  This means that investors who stick with fixed allocations will hold both leading and lagging areas, and the lagging areas may be out of favor for years.    

Professionally Managed Portfolios with Low Minimum Investments

Another option for investors who want a professionally managed portfolio of funds are our Upgrader Funds. The Funds are a simple way to participate in what FundX Investment Group (advisor to the Upgrader Funds) has been doing for 45 years now: creating and managing portfolios of funds for clients using our Upgrading investment strategy. 

The Upgrader Fund portfolios aren’t limited to only ETFs; we regularly invest in actively managed funds that have had good recent returns. And we also don’t have set allocations to different areas of the market. Instead, we shift our allocations over time as we  attempt to align with major market trends.    

By packaging our advisor services in a mutual fund, we reach a wider array of investors, many of whom didn’t meet our minimum for private money management. With the Upgrader Funds, anyone with $2,500 ($1,000 in an IRA) has access to the same fund portfolios and experienced managers as our high net-worth private clients. 

The format of a mutual fund is also convenient for investors, who can open an account directly with our shareholder services or buy the Funds at major brokers like Charles Schwab, Fidelity, and TD Ameritrade.

And the mutual fund structure is appealing since all Fund performance is audited and the Funds have a public, published track record. The Funds also have an independent board of trustees who work on behalf of shareholders. The board oversees the fund’s managers, accountants, distributors and other service providers – and holds them accountable.

As the advisor to the Funds, we work on behalf of shareholders to keep their fund portfolios invested in the funds and ETFs that have had strong recent returns. We change the portfolios in an attempt to align with major market trends. And we also talk with shareholders and prospective investors about how they can use the Funds to achieve their particular goals.

Q&A with FundX CIO Jason Browne

Q. Do you think most people have the ability to manage their own portfolios?

A. Yes. In fact, many people create pretty good portfolios on their own. When I was first starting out in this business, I worked for a big brokerage house that loved sharing statistics about the terrible decisions investors made and investor’s subsequent poor results. The firm would then argue that mutual fund selection is complicated and too difficult for investors to handle independently, and it was therefore a better deal to pay commissions for the help of a broker.

But I found that when these clients came to me, the funds they owned were often better than the expensive load funds I was supposed to sell them. I felt the problem wasn’t their ability to build a good portfolio, it was their tendency to overreact to short-term market volatility. Or that they didn’t have a strategy to guide their decisions, so they were constantly second guessing their investments. I didn’t stay long at that job because I just couldn’t stomach a career based on keeping my clients in the dark and feeding off their fears.

Q. What do you think about online investing tools like robo-advisors?

A. For some people, a robo-advisor’s online interface may feel easier and less intimidating than calling and talking directly with an advisor. Investors may be afraid they will be sold something that will do them harm, or that advisors have too many conflicts of interest to give unbiased advice. Others believe advisors are too expensive. At FundX, we work every day to try to change these perceptions.

Robo-advisors have come up with some great technology, but the construction of the portfolios isn’t transparent, and it is also hard to understand what an investor could expect from their portfolio over time. That would never work for me personally. One thing I appreciate about FundX is that in addition to our private client relationships that often span generations, we get regular calls from shareholders and even newsletter subscribers, and I see tremendous value in the personal service we provide.


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