Six Questions Every Investor and Fiduciary Should Ask Now

fiduciary investor

Six Questions Every Investor and Fiduciary Should Ask NOW

Every Fiduciary Investor should be concerned if they answer ‘YES’ to any of the following questions about their investment portfolio:

  1. Did your accounts or portfolio lose more of principal than you thought was possible?
  2. Do you understand (at least at a basic level) the underlying investment holdings as well as the overall investment strategy?
  3. As you are reviewing your 2018 year-end performance are there substantial unrealized losses in any investments that were not expected
  4. As you are reporting gains, losses, income, dividends at tax time are there significant realized losses that were unexpected or that appear out of place
  5. Is there any money missing that should be in your accounts?
  6. Are there any investments that were purchased (or continue to be held) based on incomplete information, or did not include proper risk disclosures, or that you were pressured into purchasing and believe any material information might have been incomplete or misleading?

How Did Your Investments Perform in 2018?

The reported that 2018 market returns were worst December since 1931 and the worst year in a decade.

  • You never know who’s swimming naked until the tide goes out. Warren Buffet. While many investors have experienced the benefits of a bull market that is now stretching into a tenth year, sometimes that rising tide has served to cover up flaws or other mistakes or negligence below the surface in an investment portfolio. It is important for investors and fiduciaries to take an opportunity to review the 4th Quarter 2018 portfolio performance in an effort to determine if the underlying investments and investment strategies are truly consistent with investor objectives and risk tolerance.

For example, if you or your clients owned investments with substantial exposure to the Energy Sector in the 4th Quarter of 2018, or you had substantial technology and other equity investment exposure in your portfolio in December 2018, you almost certainly have recently experienced that tide going out, and depending upon the results or consequences, now is the ideal time to ask more questions.

Watching the recent volatility and experiencing losses of over 25% in various industry sectors, and almost 10% in the market overall in a period of just a few weeks can be extremely stressful for investors, especially those who cannot afford to lose their principal including retirees or those who may be nearing retirement. In difficult market conditions, it becomes crucial to have a financial advisor you can trust and rely upon as well as a well-structured, properly diversified portfolio that is suitable for your investment objectives including your risk tolerance, even if/when the market drops.

Worst Performers of 2018

Shanghai Composite (China) Market (-29%). If your investment portfolio included substantial exposure or concentration to this market index, or a similar index-based ETF or mutual fund with similar market exposure it may be worth looking more closely.

Energy Sector (-21.2%)  this sector was up approximately 7% heading into 4th Q 2018 and experienced a (-30%) decline in just 3 months. The overall S&P 500 only has approximately 6% exposure to this industry sector. If your investment portfolio had substantially higher exposure to this industry sector, either through individual holdings, mutual funds, ETFs, or limited partnerships, MLPs, UITs, or through other various types of investment products, it may be worth looking more closely. 

Individual Securities, if your individual investment holdings included substantial losses in any of the following individual securities holdings, it may be worth a closer look as well:

Coty, Inc. (COTY) (-65%)

General Electric (GE) (57%)

Perrigo (PRGO) (-55%)

Mohawk Inds. (-55%)

Invesco (-54%)

L Brands (LB) (-40%)

Goldman Sachs (GS) (-35%)

Incyte Corp. (INCY) (-33.5%)

Acuity Brands (AYI) (-27.8%)

Kraft Heinz (KHC) (-26%)

Kimco Realty (KIM) (-25.5%)

IBM (IBM) (-25%)

DuPont (DWDP) (-25%)

What Can You Do?

Not all investment losses are legally actionable. We can help determine where/when it turns from just a market decline into an actionable claim where you can potentially recover your investment losses

In order to be held liable for investment losses, it often comes down to whether or not you can prove that losses were caused by fraud or negligence. The answer may seem simple at first; however, hidden details below the surface often identify the many different types of fraud and negligence in this area of the law, such as improper or unauthorized transfers, theft, or outright fraudulent activities. In some cases, it comes down to red flags and whether or not a supervisor within a firm should have (or was) aware of such activities and whether or not they undertook reasonable steps to detect or prevent those activities. In other cases. it comes down to proving that the fault lies with the financial advisor or the firm. 

Were there material misrepresentations related to unsuitable investment recommendations?  Was there a lack of proper diversification with over-concentration of individual securities, industry sectors or certain asset classes or investment products? While sometimes these questions can be answered by investors or fiduciaries from memory, these are typically not simple or easy answers and they often require a more detailed review and investigation. We are here to assist.

Are you a Fiduciary Investor?

If you are a fiduciary investor who has any questions related to the handling of your investment portfolio please call the Investment Loss Recovery Group at 1-800-856-3352 for a no-cost consultation and portfolio review. You can also visit us at or We handle cases nationwide. No Recovery, no Fee. We also pay lawyer-to-lawyer Florida Bar approved referral fees.


About The Author

Scroll to Top