Wealth Management Blog | WrapManager

Can You Improve Returns by Checking Your Investment Portfolio Less?

Posted by Doug Hutchinson | CFA®, Director of Research and Trading

July 6, 2016

Can You Improve Returns by Checking Your Investment Portfolio Less?

Maybe! Recent research from Columbia Business School suggests that it’s possible. Researchers found that checking an investment or retirement portfolio too frequently could result in lower returns.* That’s because investors who are overly driven by day-to-day fluctuations will often feel more emotionally compelled to make changes, which may ultimately veer them off course. The study cited that investors making decisions too often may “rebalance their holdings to get out of stocks that are dropping and miss out when they go back up.”

Factors in Bond Performance: Time or Interest Rates?– Doug's Quiz Corner

June 15, 2016

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Meaningful Diversification and Mutual Funds – Doug's Quiz Corner

May 18, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz. This time he discusses creating a meaningful and balanced diversification strategy. Good luck! Consider this scenario: Your friend Ben has been saving money and he has $10,000 that he would like to invest. Ben owns 47 different mutual funds and he is considering investing his $10,000 in a 48th mutual fund. "My goal is to be diversified," Ben tells you. "You can never have too much of a good thing so adding the 48th mutual fund to my portfolio will get me evenmore diversified. The more holdings I have, the greater the diversification benefit that I'll receive." Is it reasonable to expect that Ben will get a meaningful diversification benefit by adding a 48th mutual fund to his portfolio? [+] Read More

ETF Currency – Doug’s Quiz Corner

April 13, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz. This time he tests our knowledge of how currency risk can impact an investment. Good luck! Consider this scenario: Your friend Katrina bought $10,000 of an Exchange Traded Fund (ETF) that tracks the performance of an index of Japanese equities. [+] Read More

Tax Aversion – Doug’s Quiz Corner

March 9, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding how tax aversion can sometimes lead investors to make sub-optimal investment decisions. Good luck! Consider this scenario: Your friend Jeff owns a mutual fund worth $100,000 in his taxable account. Jeff has been considering selling the mutual fund and replacing it with a similar investment with lower fees (and, therefore better projected net of fees returns). However, Jeff is leaning toward not selling his mutual fund because his cost basis on the mutual fund is $75,000, so selling it would create a taxable gain of $25,000. [+] Read More

ETF Tracking Error – Doug’s Quiz Corner

February 10, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding the factors that may cause the performance of an ETF to differ from the performance of an index. [+] Read More

Human Capital and Your Investment Portfolio - Doug's Quiz Corner

January 13, 2016

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding the potential effect of human capital on your investment strategy. Good luck! [+] Read More

Conjunction Probabilities and Behavioral Finance – Doug’s Quiz Corner

December 16, 2015

Quizmaster, Doug Hutchinson has come up with another great quiz. This month, he demonstrates how cognitive bias can influence our perspectives and decisions. Good luck! Consider the following scenario: Laura is a recent graduate of UC Berkeley where she majored in English and Environmental Studies. As a student, Laura was very concerned with social justice issues and environmental issues. She is an avid reader and a vegetarian. Indicate which of the following cases is most probable? Which case is the least probable? A) Laura works in the banking industry B) Laura works as a librarian C) Laura works as a librarian, takes yoga classes, and is a member of the Sierra Club D) Laura works in the banking industry and is a member of the Sierra Club [+] Read More

Leveraged ETFs - Doug's Quiz Corner

November 18, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores the compounding effect of leveraged ETFs. Let’s see what the math has to say. [+] Read More

Harvesting Losses - Doug's Quiz Corner

October 13, 2015

Quizmaster Doug Hutchinson has come up with another great quiz that explores the effect of harvesting losses. Let’s see what the math has to say. Good luck! First, a definition of tax loss harvesting. Tax Loss Harvesting is the practice of selling a security that has experienced a loss. By realizing, or "harvesting" a loss, investors are able to offset taxes on gains. The sold security may be held in cash or replaced by a similar one (keeping in mind wash sale rules), to help maintain the optimal asset allocation. [+] Read More