When an investor asks us to perform an analysis of his/her current portfolio, we find that 85% of people fall into quadrants 2, 3, or 4 on the above chart. This is clearly not the way to build lasting wealth!

Interestingly, the biggest problem we see with mutual fund portfolios today is not lack of diversification, but over diversification! When an investor asks us to analyze a fund portfolio, we often find 5, 10, or even 20 funds in the portfolio meaning that the portfolio could potentially have thousands of individual securities! We often ask, "how do you plan on beating the market when you are the market?" We call this the "shotgun approach to investing," and it leads to mediocre results. 

Also, it's not uncommon to find three or four funds in an investors portfolio that actually own the same underlying security, yet one fund will be charging a low management fee, and another will be charging a high management fee. This phenomenon is called duplication, and it creates huge inefficiencies in a portfolio.

Can these common issues be fixed?  Of course, but it takes time, knowledge, and research resources to build a fund management methodology that specifically addresses these issues.  

We consider it our primary responsibility to help investors become, and stay, "Quadrant #1 Investors."  This is how large corporations, endowments and pensions manage money, so we see no reason why everyone shouldn’t practice this level of diligence. Ask us about our proprietary process for managing a fund portfolio. We think you'll agree it addresses all these common mistakes, and can help you become a Quadrant #1 investor.