Building an investment portfolio is a lot like cooking!  Recently I was talking with a friend about his Bolognese sauce and his method to cooking it.  That type of sauce varies greatly with various ingredients.  Of course, chefs will use recipes and styles that they think will be optimal.  I always thought that a great chef will not only use the best ingredients, understand the amounts to be used, but - most importantly, cater any dish to the tastes of the patrons – not their own desires.

Even if a meal is created with the best of ingredients, other factors like cooking method, timing and the correct quantities will ultimately decide the outcome. 

When a professional is building a portfolio for investors, it looks a lot like a recipe and quality choices are paramount.  During the process of cooking, certain ingredients may be added as a chef may make adjustments as they sample the dish.  Just as when a portfolio is in place, regular monitoring and adjusting should take place to adapt to changes in the markets, the economy and to changes in a person’s life, which is critical. 

The investment options to investors are vast, the strategies may seem complex and for some, the entire process may be overwhelming. 

Whether you’re doing it on your own or using a professional, the ingredients and methods matter greatly, however the portfolio should be catered to the taste and needs of the investor, not the chef’s.

Peter Janowsky