Managing Your Investment Portfolio

As a former stock analyst, I often get questions about what stocks to buy or how to manage an investment portfolio. I am not going to recommend specific stocks in this blog because I believe there is already an overwhelming amount of financial advice on the web and because I no longer follow individual companies closely enough to make recommendations with conviction. But I do have some suggestions on how to manage your investment portfolio.

  1. Know what you own – Older adults with upper middle incomes or higher have typically amassed a portfolio pre or post retirement that includes cash, stocks and bonds. But the portfolio is often spread across a variety of bank and brokerage accounts, certificated of deposit (CDs), investment retirement accounts (IRAs), 401k’s and other investment vehicles. In my experience it is not unusual for individuals or couples to view each of these investments as discrete investments, perhaps focusing on the one or two largest account, rather than taking a complete inventory of their total investment portfolio at least once or twice a year.
  2. Limit the number of accounts in which you hold assets – While shopping on line for the best CD rates and using an online brokerage account to trade stocks, while maintaining other accounts for IRAs and 401ks, may save you fees, I have found the complexity multiple accounts adds to managing a portfolio often leads to less well informed decisions on your overall portfolio and often represents false economy. If you insist on using multiple accounts, and particularly if you have six or more, it is essential that you keep a financial inventory where all accounts and passwords are kept, regularly update it and share it with others. It is also essential that you brief your spouse and heirs on where this information is located and be sure they can readily access it in the event of your death or disability.
  3. Decide on an asset allocation that works for you – Even though I made my living for many years recommending stocks to institutional investors, I was generally prevented from owning any of the stocks that I followed as an analyst. The primary way I managed my own portfolio was to focus on an overall asset allocation – the percentage of stocks, bonds and cash I wanted to hold. Then within the stock portion of the portfolio I considered the percentage of large, small and mid cap and international stocks I wanted to hold and whether I wanted to own individual stocks, managed funds, or exchange traded or index funds. In the bond portion of the portfolio I considered the maturities I wish to hold and again how I wished to gain exposure to bonds. There are many suggested asset allocations by age online, as well as asset allocation tools that allow you to enter your age and other information before recommending an allocation for you. One traditional rule of thumb is that the amount of bonds in your portfolio should equal your age but with increased longevity and current low interest rates many advisors consider “Percentage of Bond = Age” be too conservative. The conservative end of the T. Rowe Price asset allocation model, to use one example, suggests 60% stocks/30% bonds and 10% short-term investments (cash or cash equivalents) for an investor in his or her 50s, 50% stock, 35% bonds and 15% short-term investments for an investor in his or her 60s and 20% stock, 50% bonds and 30% cash for an investor in his or her 70s. But even within the T. Rowe Price model the mix of bonds and stocks can vary a good deal dependent on your risk tolerance and your life expectancy and I am more aggressive in my personal allocation to stocks than the conservative end of the T. Rowe model suggests. Asset allocations can also address the mix of large cap, small/mid cap and international stocks in a portfolio but an in depth discussion of stock allocations is too long for this blog post. The best way to get a sense of the asset allocation that is right for you is to review a number of different allocation models and think about how your own personal circumstances and risk tolerance fit with one or more of these. Discussing asset allocation with a broker or financial advisor in which you have confidence can also be very helpful.
  4. Use asset allocation to reallocate your portfolio at least once a year –I highly recommend using asset allocation as a tool to rebalance your portfolio on a regular basis.   This forces you to avoid the pitfall of most investors, which is an unwillingness to buy when valuations are low and sell when valuations are high.  There are three steps in using asset allocation to rebalance your portfolio.  The first is to determine the mix of stocks, bonds and cash or cash equivalents in your existing portfolio.    This is not as easy as you may think because many mutual funds may combine both stocks and bonds within an single account and may also hold a portion of cash at any given time.    Getting the details on each account can sometimes get difficult, particularly if you want to do a more refined asset allocation, separating out large cap from small, mid-cap and international funds and perhaps separating out real estate investment like REITs from other types of stocks.    This is one of the reasons I prefer fewer accounts and it is something a full-service broker can do for you.    The second step is to compare your actual asset allocation to the allocation that you believe works for you and the third step is buying or selling stock or bonds to move your allocation back toward the model allocation you selected.    Shifting the allocation does not have to be done all at once but you should have the discipline to implement it over a relatively short period of time if you want to use  asset allocation to manage your portfolio.


National Geographic Islander

Our 2015 trip to the Galapagos was my wife’s choice.   While I had an interest in the ecology and evolutionary history of the islands, my preferred vacation would have been more urban and more culturally focused.   But both my wife and I found the Galapagos to be a spectacular trip.   Never before had we been immersed in a natural environment where the animals were so oblivious to your presence and the range of geology, plants, animals, marine life and sheer beauty of the islands were spectacular.

The Galapagos Islands are located about 1,100 kilometers/600 miles west of Ecuador and are easier to reach than most people realize.   You will need to look at a map to believe this, but Ecuador on the west coast of South America is south of the U.S. east coast and in the Eastern Time Zone.   The Galapagos are in the Central Time Zone.   Travel time from Miami to Guayaquil, Ecuador (its largest city and a port from which many Galapagos trips depart) is about 4.5 hours and the flight time from Guayaquil to one of two spartan but relatively modern airports in the Galapagos is about 2 hours on modern 737s.

Sea Lion Pup

The entire Galapagos Islands group and all of the waters surrounding them are a national park and marine reserve administered by Ecuador, of which they are part. From what we could see, the park is very well managed despite pressures from a booming tourism-based economy which accommodated about 220,000 visitors in 2014.   Since 1998, when Ecuador passed a constitutional amendment giving the government greater power over the Galapagos, the number of ships visiting the islands have been monitored and the visits to individual islands and islets by each ship is controlled on an hour by hour basis.   This limits the number of visitors on any given island at any given time.   The Park Service limits visits to certain islands, requires all visitors to stay on designated paths and requires well-trained licensed guides to accompany all visitors on land.   Fishing around the islands is largely limited to what is needed to support the local population and immigration to the islands of foreigners and Ecuadorians from the mainland  is controlled to prevent over-population and over-development. Several of the islands are inhabited with the largest city having a population of about 25,000.

Fees paid by tourist to visit the islands are used for research and breeding programs, to improve tourist facilities and to eradicate non-native species, such as goats and donkeys, improving prospects to unique native species to survive.   Special efforts are taken to limit contamination from additional non-native species to the islands and from island to island.


There are both land-based and ship based options for seeing the Galapagos but since the land-based options require day trips by ship to see the diversity of the Islands, the ship-based options allow you to see more and seemed generally more attractive than the guest houses and hotels on shore we saw during our visit.   There are a wide ranges of ships, from one’s accommodating a dozen or fewer to one’s with about 100 passengers.

We visited the Galapagos on a National Geographic tour on the Islander managed by Lindblad Expeditions, which operates ship-based tours for National Geographic.   The Islander can accommodate up to 48 passengers, comes with a tour director and three guides/naturalists who lead excursions and the ships crew.   It is a well-appointed ship that you can see on

We found the Lindblad/National Geographic tour to be very well done, with comfortable accommodations, good food, excellent tour staff and crew.   However, it is important to understand that this is an active tour, with twice-a-day hikes sometimes over hilly and rocky terrain, snorkeling and transfers to and from shore on zodiac boats.   You don’t have to do everything and in a number of instances there were less strenuous options for those that did not want to do the full hike. But if you are not at least an active walker, you will miss much of what the tour has to offer.

One travel magazine recently indicated visiting the Galapagos is the number one bucket list trip for tourists worldwide.   I would definitely have it on my bucket list and as a near-retiree when I took my trip to the Galapagos I was glad I did the trip sooner, rather than later, while you I was still able to handle the physical demands of the trip.   Ages of those on our trip ranged from about 8 to 80 with most in their 50s and 60s.


My experience indicates there are two times in the lives of many seniors when downsizing is most likely to be considered.   The first occurs in one’s late 50s or 60s after the kids have left home and the second in one’s late 70s or 80s when care needs may dictate a move to a more manageable setting with greater options for care and support.   The first move may start with or incorporate a second home or may only involve a move of a primary residence.

Thanks to the creativity of America’s homebuilding and seniors housing and care industries and the substantial buying power of affluent seniors there are a wide array of housing and location choices for seniors to consider.     In this blog post I focus on the first downsizing move, that undertaken by many in their late 50s or 60s.   See the section of this blog on seniors housing and care for a discussion of moves to supportive environments at a later age.

Let me start with my own downsizing decision.   When I was 55, and my wife a year younger, we moved to a 2,700 sq. ft. three bedroom condominium from our 3,300+ sq. ft., cedar shake, four bedroom home in a well established neighborhood where we had lived for over 12 years and raised our son. Our decision to downsize was driven by my belief that there would be strong demand from baby boomers as they aged for well-located condominiums and we it would be better to buy ours before competition from other boomers increased prices.

The condominium we selected is in a mid-century modern highrise building designed by Mies van der Rohe.   We found our downsized home after a about a year of looking for a condominium and a couple attempts at bidding. It took this long for us to understand our options and think through the location and environment we wanted. We looked at both townhouse type and multi-story condominium units in a variety of neighborhoods.

When we began looking for a smaller home in the Baltimore market we found that while 1,500 to 2,000 sq. ft. two bedroom condos are very prevalent there are relatively few large units better suited to baby boomers downsizing from a single family home.   Our key criteria for a downsized home included:

  • Having everything on one floor
  • Three bedrooms, one for us, one for a guest room and one for an office
  • An accessible location, near restaurants, medical care and public transportation
  • Enough space to entertain
  • Covered parking
  • Security

In the end there were relatively few units that met all of our criteria. We could choose between a number of high-rise buildings near the established neighborhoods where we had lived for many years and new and converted buildings on or near the waterfront in downtown Baltimore.   We also found some very nice detached and luxury townhouse units but some of these were bigger than we needed and were not in accessible locations. We opted for a multi-story condominium building closer to the established neighborhood where we previously lived rather than a building near the water because it was closer to friends and, while the water was nice, it came with about a 50% price premium for a unit of similar size.

The building we choose offers one story living, has a doorman who can deliver your groceries, dry cleaning and packages, is on a bus line and is walking distance to restaurants, some shops and The Johns Hopkins University’s Homewood campus with its library, book store, cultural and sporting events and green space. It is a home where we should be able to live for many years, even if we become less mobile or have to give up driving.

Mistakes, from my perspective, I see others making in downsizing include choosing:

  • Multi-story townhouses when the ability to negotiate stairs could become an issue in future years, if even for temporary periods
  • Locations where no public transit or even decent cab or ride service options, like Uber or Lyft, exist
  • Locations remote from family, friends, social and cultural activities and medical care
  • Designs poorly adapted to aging even when offering first floor master bedrooms, such as laundry rooms on another floor or just enough stairs to make the home inaccessible for wheelchairs without expensive and unsightly renovations

Even though baby boomers in their 50s and 60s may be in very good health, able to drive and have few cares about temporary or ongoing physical limitations, I would not purchase a downsized-home in which it may be difficult to age with but I welcome your views.