I just turned 50. The big five-O. I can’t believe it. Even more than that, I can’t believe the things this “milestone” is forcing me to think about. All the fun things I’ve done, and what should that list of fun things include in chapter two? Followed by, “How do I get more money to do those fun things?” And then, “Have I saved enough money for retirement?” And finally, “crap.”
So, savings. I’ve read all kinds of tips on how to become a better saver. And part two of that equation, how to make those savings grow. Being a Bostonian, I really want to make those savings grow wicked good. Wicked pissa growth is what I want, frankly. Part three of the recipe is what’s the maximum “growth rate” I can achieve, am I achieving it, and if not, why not? My broker tells me that, right? Not really.
My “growth rate”, otherwise known as return on investment (ROI), or “investment performance” is an elusive animal. It’s critical, for me personally, to understand. It’s critical for every individual investor. And it’s the reason why I’m passionate about being involved in building the Scivantage Wealthsqope Portfolio performance engine.
And that will be the last time I use the word “performance” in this blog. People’s eyes cross when I use that word. What Wealthsqope Portfolio gives me is my growth rate. It helps me understand and improve that growth rate by defining for me the critical elements and helping me to take action. As an investor, I want my growth rate engine to address certain concepts, doubts, emotions that creep in and confuse me or otherwise hurt my ability to grow:
- “Gambling”– There, I said it. I have often used the stock market as a glorified casino. I know I’m not alone. I’ve taken a lot of risk. That can be OK, if the reward in exchange for that risk is commensurate. Wealthsqope Portfolio tells me if it is.
- “I know I’m not alone” – I want the best performing ideas from a community of like-minded investors. I don’t really want a chat board. The world has plenty of that. I want useful analysis of what these guys are doing, presented in a way that helps me do better. And, I’m not ashamed to admit that I want to know if my returns suck worse than my buddies.
- “The stock market returns 8% year after year” – Awesome! Give me some of that. But what stock market are we talking about? I’m pretty sure I’m not in the whole market. I like technology stocks and own a few. I want to know how the piece of the stock market that most resembles my portfolio is returning as compared to my portfolio. I want my portfolio to be benchmarked against my piece of the market, and I really want to know what I can attribute my results to, good or bad, so I can make educated improvements.
- “Everything, all of the time, any way I want it”– I have a bunch of stuff, in multiple places, for different reasons and strategies, all of which add up to one cohesive financial package that gives me the highest possible rate of return (right?). I want to play with it, combine it, break it up, look at one stock, one sector, all accounts, two accounts combined, at 3AM, on my phone, PC, tablet. I want, and deserve, to know any little thing affecting the growth of my money if I’m directing it, and maybe even more importantly if someone else is. I need complete transparency in order to trust my plan.
In technical terms, Wealthsqope Portfolio provides me with risk management, peer analysis, benchmarking/attribution, and aggregated returns, all in a responsive package. The bottom line, though, in human terms, is that Wealthsqope Portfolio keeps me and my advisor honest in the process of growing my savings. I wish I had it 20 years ago.
This is why I love my job. I get to build the tools that solve problems, encourage investors and ultimately, innovations that change the way we look at investments.