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Funds 509: Refining Your Portfolio

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1.
After a major life event, you should _______.
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Re-evaluate your investment goals and risk tolerance. Not every life event has to trigger changes for every investor's portfolio. But we should all re-evaluate our financial plans as we pass through a life stage.
2.
Every life event triggers changes for an investor's portfolio.
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False. Any given life event may or may not trigger such a change, though most do.
3.
If you want to work with a financial advisor, what's the first thing you should do?
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Decide what you're looking for--a comprehensive plan or help with a specific issue. The first step is deciding what you want. Are you looking for someone to handle part of your financial life or are you seeking a financial advisor who can take care of it all? Talk to advisors and gather references after you know what you need.
4.
What kind of organizations would you consult to find out whether a prospective financial advisor has ever been subjected to disciplinary action?
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Regulatory organizations. Regulatory organizations--whether professional or governmental--can tell you whether your candidate has ever been disciplined.
5.
To determine how profitable a company is, you can examine its cash flow.
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False. Cash flow does not tell you much about profitability. The metric you want is return on assets, which measures how well a company uses investors' money.