Stanley Cup takes a swim in Mario Lemieux's pool in 2009.

Stanley Cup takes a swim in Mario Lemieux’s pool in 2009.


We all have favorite things. It could be a certain type of food, a book, a song or even a vacation spot that holds special memories. Just as Orb, the favorite in the Kentucky Derby, was crossing the finish line Saturday, many people felt he was the pick to win and he didn’t disappoint. Many feel the Pittsburgh Penguins are the favorite to the win the 2013 Stanley Cup. We’ll have to wait a while to see if that prediction comes true.

Favorites in Investing

Investing in the market can also be predicated on favorites. For you, it might be a specific mutual fund you’ve held for a while or a stock that has provided quality returns. If that is the case, you’ve probably had conversations with your financial advisor about keeping that particular asset in your portfolio. The last thing you want is to let go of a fund that has provided you with quality returns since you first purchased it. If you’re one of those people, you are doing exactly the right thing. Holding on to winners in your portfolio and assets that have withstood the volatility the market has displayed in recent years is a prudent measure of investing. It’s certainly reasonable to trim positions to maneuver them back to their expected allocations, but make sure you keep cornerstone positions in your portfolio that have performed well over the years.

Finding your “Franchise Quarterback”

Perhaps you’re wondering how to recognize a position that could turn out to be a favorite. Look for consistent returns relative to the overall action of the market. Track it against a corresponding benchmark or measure it against another fund or stock in a similar asset category. If it consistently outperforms the benchmark with probable lower volatility, it could be one that could quarterback your portfolio for years. Of course, you’re financial advisor can educate in this process and answer any questions you may have. In fact, your advisor may balance and maneuver your portfolio on a regular basis but make sure if there is a position you want to keep, bring it to their attention.

So go online and check out the funds in your portfolio and study the returns of each product since they became a part of your portfolio. Study the 5-year numbers and especially how they performed in the meltdown of late 2008 and the first three months of 2009. This should give you a good start to figuring out which funds would make your favorite list. Remember, it’s your money and if there is a fund or stock that you want in your portfolio, make it known to your advisor. After all, a goal of any portfolio is to grow the assets and provide comfort in retirement. Why shouldn’t you have a favorite or two in there to help that cause?