The stuff you don’t know about your investment portfolio

by Michael Tarsala

There’s a lot that investors do not know about what’s in their investment portfolios — as well as what’s behind them — according to a new SEC report about investor literacy.

The just-released report made the following conclusions about U.S. investors:

• Many do not understand simple financial concepts, such as interest, inflation and diversification.
• Investors are not equipped to track investment costs, and they understand little about how those costs can impact their investment returns.
• Many lack critical knowledge about investment fraud and how to avoid it.

There also were some very clear conclusions in the report about what investors want to see from financial firms:

• Disclosures need to be written in clear, plain and understandable language — and to come in a readable font size. They should use common terminology instead of jargon.
• Details about investment strategy, past performance, experience and risk factors all matter. That information also needs to be written in plain language, with tables and charts that help investors make sense of the key data.
• Fees and compensation information needs to be to the point.

If you are in the majority and you want plain facts and straightforward communication from a financial adviser, give us a call at Covestor.

Unlike some competitors, we offer plain-language descriptions about the approach, and disciplines of all of our investment choices. There are plenty of easy-to-follow charts and tables that detail risk levels, performance and underlying holdings.

Fees are simple here. You pay between 0.5% and 2% depending on the investment model you choose. We split the fees 50-50 with the managers on our platform. You can read more under our disclosures section.

Here’s what truly makes us different, and better:

We let subscribers see their money manager’s entire investment model. You can also watch a manager’s every move in the market, usually a day after he or she makes them. Traditional advisers rarely, if ever, provide that level of access.

Most of our managers write frequently on our Web site, in their own words. You’ll get insights into how they view upcoming market risks, and the details behind their recent buy and sell decisions.

Invest with us, and your money is held in an account bearing your name. It’s separate from everyone else’s money. No one is earning interest on it. You can see the balance change on a daily basis, make investment changes quickly, and add to or pull your money at your complete discretion.

To learn more, give us a call at 866-825-3005, x 703.

Photo by: Iuvalladolid.com