Opinions on this portfolio

[Bram]

I received a multi-page report from my Ameriprise FA today. I'd like some feedback on this scenario:

60 yr old female with a 401(k) valued @ ~ $240K; will not be tapping into for 5 yrs or so

Asset allocation: 100% MF; 50% balanced 50% large cap stock

Portfolio Performance (past 12 months): 13.35% (after hidden fees)
Benchmark: S&P 500......................... 15.74%
Benchmark: DJ 30 Industrial Ave........ 15.70%


These are the only moneys that are subject to making alternative decisions (well there is $26K in a Roth CD with a bank), the rest of the retirement income will be SS & a retirement pension. Have I provided enough info for serious feedback?

I read here the other day, where a poster said her portfolio was benchmarked against S&P & that seemed to be nixed by the informed financial minds here (if I understood correctly). Does that opinion hold true for the above info too?

Keep in mind, I'm really a lightweight when it comes to investment knowledge, so I'm hoping my questions aren't too ignorant. I want to learn, though.

 

[LOL!]

You have to figure out how much fixed income is in your portfolio in order to figure out what the benchmark return for last year might be. A portfolio of 60% stock, 40% fixed income returned between 13% and 14% for 2006. Your 50% balanced, 50% large cap may be something like 80% stock overall and 20% bonds. I think that should have returned about 16.5% to 17.5% last year depending on whether you had some international stocks in there and whether you had a value tilt or not.

You can probably go to http://portfolio.morningstar.com/NewPort/Free/InstantXRayDEntry.aspx?tsection=toolsxray and enter your funds with amounts to get your analysis for free.

 

[FinanceDude]

One thing I hardly ever see mentioned on here is the beta of a portfolio. Fact is, I think beta IS an important factor.

Most indexes, like the S&P 500, have a beta of 1.0 A good value fund might have a beta of .60-.70, meaning it is 30-40% LESS volatile than the corresponding index it is matched against.

To me, not including beta in the discussion makes it hard to know if it's "right" or not for an investor, along with risk tolerance, etc.

Get your broker to give you the weighted beta of the portfolio, and we can probably give you a better answer............