Portfolio Management: Small Improvements Add Up

Tina Haapala |

By Gary Silverman, CFP®


We’re in the midst of examining some pearls of wisdom I’ve learned over the years when it comes to managing an investment portfolio. My career involves managing people’s investments and on occasion helping the do-it-yourselfers who don’t want or need me to play with their money on a regular basis. As you can imagine, the world of investments changes every day. There is always some new fund, product, tactic, or strategy that I just have to start using…or at least that’s what the salespeople  selling  those things tell me in the weekly phone calls, visits, and meetings.

But the thing is, while most of what is “new” isn’t all that new or even all that useful, it is true that things change and I have to be ready to change with them. This is good for me and good for my clients. Because of this, I strive to improve continuously.

Since it is rare for a world-class economic, investment, or business expert to come into town, and the odds of seeing a major financial conference in Wichita Falls are about nil, I travel a good amount to keep up and keep ahead. Because of technology, I sometimes only need to travel to my computer, but there is still something about being immersed in a live group of your peers and industry experts that heightens the experience. Some of the best information comes from ad hoc conversations in the hallways. Besides, there is a lot to be said about getting out of the office for a while.

That’s why I am sometimes found in places like Orlando or San Diego. Before you get jealous, realize that while conferences can be entertaining, they also involve long hours, a good amount of concentration, and a lot of homework upon returning. (Before you feel sorry for me, remember I was probably in Orlando or San Diego.)

After listening to some fantastic keynote speakers, sitting through a dozen seminars and workshops, visiting with well over 100 vendors, and dining with some of the most knowledgeable and influential people in my field, the real work begins. A backpack worth of notes gets on the plane with me, and I filter it down to about a dozen pages by the time I get home.

Even with all of that, I estimate that the changes I make in our client portfolios on my return represents less than one-percent of the money they invest. The small number has to do with the fact that I’ve been tweaking on things for over two decades, so each year the incremental changes are smaller. Although the changes are small, I go through all the trouble because improvement is worth it: a little improvement now compounds each year.

Continual incremental compounding improvement is not limited to me, or other investment dudes. You can use good information from others to make small improvements in your own finances. That’s probably why you are reading this column. Make enough of these changes and they will add up to overall improvement. And that’s the best kind of change.


Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing