couple looking at thoughtful investment process reports

Thoughtful Investment Process

A brokerage statement can be a neat, orderly presentation of chaos if we focus on the wrong things. What if we had a sense of what our investments should be doing, not just what they did? What if we made a thoughtful investment process the norm?

Case in point: Compare your statements from the end of the last three quarters and see how the ups and the downs of your accounts were presented for your review. Orderly rows and pie charts make your investments look organized and coordinated.

After scanning that neat presentation, your eye is then drawn to the bottom line: Ending Market Value. That’s where the judgement begins. Each statement is a snapshot in time that tempts us to pass judgement on what we see.


Think of some recent questions and conclusions that your quarter-end statements might have prompted:

  • 12/31/2019: Your accounts may have been up double digits leading you to conclude that your strategy is sound and that your advisor was making all the right moves.
  • 3/31/2020:  The markets fell into chaos and those stocks and funds that had been winners for so long looked awful at the end of March. Are they still right for you?
  • 6/30/2020:  Sure, bonds were safe during the drop in the stock market, but now precious metals are pushing toward record territory. Are gold and silver better than bonds in this environment?

By focusing on what is up or down for a given period we risk developing the investor equivalent of ‘Tunnel Vision’.  Are the funds that are up good and the laggards bad? We see facts and figures, but we miss important details about how all the pieces are working in concert.


It is easy to be baited into the ‘good or bad’ trap because of the way information is presented. Brokerage statements and their online portals are notoriously confusing, and waste a great deal of space telling you two marginally helpful things:

  1. What you own: A laundry list of stocks, mutual funds, ETFs, and bonds.
  2. What it did: At the beginning of the month it was worth $XXX, and the end of the month it was worth $YYY. If you’re lucky, you might see performance as a percentage, net of fees. But just as likely, you will need to do the math.

What would be helpful is to understand the purpose behind of each of your investments. Why is this fund here and how does it contribute to your financial success? You need a framework that puts what you own in context. So that reviewing your investments is not about judging whether they are good or bad, up or down. Instead, you can learn to ask a more telling question:

Are my investments doing their job?


Sometimes a fund that is lagging is doing exactly what it is supposed to do. Bonds are notorious for this. Over long periods of time, stocks will outperform bonds and lead us to believe that the safety of fixed income investments is out of fashion. Until it isn’t. Every investment has a season and a purpose (“Turn, Turn, Turn,” as The Byrds would say).

When you look at your investments, do you see the underlying philosophy of your investment advisor tailored to your plan? Do you see a belief in low cost investing, diversification, and good discipline?  Or it is just a laundry list of “things”?

When we at Morton Brown Family Wealth build a portfolio for our clients, each investment fits into one of five “sleeves”. Each sleeve serves a purpose, designed to address a unique risk or opportunity. Guided by the needs of an individual family’s plan, each sleeve is weighted in proportions that are thoughtful today and can be responsive to change tomorrow. By designing our investment strategy this way, it helps us avoid the risk of being caught on offense when we should have been playing defense. Each sleeve has a purpose, just like each investment inside of it.


So, how does a thoughtful investment process show up on a statement? By design. Through partnership with some of the best financial technology firms, we have crafted reports that simplify the information of a traditional brokerage statement. The reports, both static and online, are available through our client portal. They reflect our investment methods and reinforce the underlying philosophy. When we sit down for periodic reviews, the performance conversation has a framework where the judgement of good or bad is replaced by an intelligent assessment of how effectively each sleeve of the strategy is doing its job.

Determining whether an investment is up or down or performing better than a benchmark doesn’t require much work. Your advisor should be spending time on the more difficult task: Is an investment doing its job according to your plan? The answer might require thought, analysis and…patience.

If you need help deciphering your statements and your strategy, let us know. We earn our living reconciling what we hear from people and what we see on paper in their statements. If you feel disconnected from what you see in your monthly statements, then maybe it is worth considering a thoughtful investment process.