Have you made the choice to outsource investment management? If so, you are well aware that the number of managers and strategies being used can expand to the point where ongoing due diligence is a challenge. Plus, different investment instruments may require various levels of attention. For example, a separately managed account (SMA)—which we will focus on here—does not have a prospectus and qualifies for more frequent monitoring.

Like many financial advisors, I am often called on to help my family and friends with financial matters. In my experience advising different generations and age groups, there are some common questions and problems that keep coming up, especially in relation to investment fear and greed. What I tell them—and what I wish trusted advisors would tell their existing and prospective clients—depends on where they are in life.

Today, the Baby Boom generation (1946–1964), Generation X (1965–1981), and Generation Y (a.k.a. millennials [1982–2000]) represent a fairly even distribution of our country’s workforce and shape the dominant consumption patterns driving the U.S. economy. Each of these generations has been influenced by different economic events that have shaped their financial attitudes and beliefs. But what’s really interesting? Their financial goals, asset allocations, and investment preferences share meaningful similarities. Let’s uncover some of the investing trends across generations, including similarities and differences, as well as potential opportunities for financial advisors.

When thinking about market risk factors we should worry about, the list is quite extensive. Just googling “economic statistics,” for example, will give you about 365 million results. If you search “stock market statistics,” you’ll get only 8.5 million hits. The question, then, is how can we refine the data points to determine which indicators truly belong on our risk radar?

Here at Commonwealth, our Data Integrity team maintains and reconciles all of the data that appears on our Client360°^®, Practice360°^®, and Investor360°^® platforms. These systems allow our affiliated advisors and their clients to manage many aspects of their overall financial picture.

But with all this data at their fingertips, many advisors still struggle with the best way to measure portfolio performance. Specifically, they often ask us about the difference between time-weighted return (TWR) and internal rate of return (IRR), also known as dollar-weighted return, and which option might be better to use.