Many investors’ existing portfolios are not well suited to accomplish their goals.  But how does one determine whether a portfolio is well constructed or poorly constructed?

I have categorized the important elements into five categories.  These broad categories are asset allocation appropriateness, diversification, security selection, investment decision-making process, and tax efficiency.  These categories are not mutually exclusive, due to the subjective nature of the task and the fact that most investment decisions have a wide range of effects and consequences. Read the rest of this entry »