Here in Florida, hurricane season starts on June 1st and runs until November 30th. It is an annual reminder that we should hope for the best and prepare for the worst. We just had a major hurricane hit the Gulf Coast of Florida and this has provided me an opportunity to think about how we prepare for life’s events.

What separates those who ultimately have to escape to their roofs and those who watch these events unfold from the safety of a screen after ample preparation and discipline?

So, I ask, as it relates to your financial well-being, is hope an adequate strategy?

“I review non-clients’ portfolios almost daily.”

While many people would find this task a chore, I have loved it ever since I started dissecting Warren Buffet’s annual letters as a preteen.

I would say about one in five portfolios are well thought out, created with specific goals in mind, would pass fiduciary scrutiny, adapt to markets, and are remeasured on a frequent enough basis to correct, if needed. Sadly, the majority of portfolios fall woefully short on 1 or all of the above criteria.

Continuing with our storm analogy, if your portfolio is amongst the four in five that are inadequate you might be the same folks who see the storm surge rising, retreat to your second floor, then the roofs, then have to pray that the lifeboats are coming. For whatever reason, warnings went unheeded and there are consequences. When it comes to personal finance, sometimes the fear of facing reality is so great that we choose to stick our heads in the sand, often much to our own detriment.

Where Portfolios Fall Short

Below are the three most common areas where portfolios fall short and some common symptoms.

No Plan

• Have no budget, financial, estate, or investment plan
• Think 401k saving is enough
• Financial anxieties arise weekly, monthly, or yearly around the same time

High Costs: Fees & Taxes

• If you don’t know the fees you’re paying across your investments you’re likely paying too much
• Too many annuities and life insurance products
• No tax loss harvesting or high fund turnover

Low Management & Mutual Funds

• Advisors set and forget with mutual funds
• Not buying or selling opportunistically
• Not regularly revisiting plans and investments

If any of the above feels like it could apply to you or your investments, you’re likely unprepared for the next financial hurricane and some preparations are needed!

“Dreams without goals are just dreams and ultimately, they fuel disappointment.”