IRA – Real Results

Investment Advisor vs Loan OfficerIRA  The chart below shows how a  Capital Advisor in Arizona has performed over the past 4 years on a real live account.  This company is on the local radio station KFNN in Phoenix and in my opinion talks a good game BUT the real results are different….

Bottom line I have lost over $300,000 in the value of my IRA under their management.


  • For most of 2007 the IRA tracked the S&P and DOW.
  • They had a good run up in early 2008. I believe this was because they were in funds that were leveraged 2 to 1.
  • The markets tanked in late 2008 and the IRA did also.
  • In 2009, June and July was the turning point when the performance of the IRA fell well below the S&P and DOW.  Although the ups and downs correlate the IRA under-performed the indexes by as much as 7% monthly.
  • By 2010 the IRA performance falls well below the DOW and S&P. I believe this is because the IRA was using 2 to 1 leveraged negatively correlated funds so when the markets were up the IRA was up but on the down turn they went double that of the markets.

I am in the process of moving the IRA to another Financial Advisor before this firm loses it all.

October 20, 2011 UPDATE:

Results since Jan 1 2011

IRA                                                      DOWN   -27.6%
DOW                                                    DOWN     -5.7%
S&P                                                      DOWN     -10.1%




For the comparison I obtained the financial results of the Dow and S&P 500 I used these two sites:



 The Importance of an Audited Track Record

A lot of financial advisors have  a canned speal when asked about past performance.  They emphatically tell you that every account is different,  different risk tolerances, different objectives etc etc etc.  They tell you they can not divulge the results they have on other peoples account.  They may offer up one or two of their clients, who are actually happy with the management, as references. But they end up quoting the “past performance does not guarantee future results” disclaimer.

BUT doesn’t past performance reflect directly on the advisors investment judgement ?

Independent of the marketing presenation material and the sales capabilities of the advisor a track record and better yet an audited track record shows the correleation between the advisors decision making, investment judgment and what the markets have done during that same period.

If the markets were in a Bull, Bear or moving sideways trend how did the advisor handel that in the past.  This is a great indicator of how they will do in the future. If those results from the past have been audited by a reputable 3rd party better yet.

A survey conducted by the Paladin Registry of 4000 investors concluded 91.4% of inverstors want know the investment performance track record of their financial advisor or potential finanacial advisor.

The CFA Institute’s Global Investment Performance Standards (GIPS) actually has developed a standard for investment managers to present thier investment track reordsv using Generally Accepted Accounting Principals (GAAP)

So, you have a need to know, the invent managers have a way to give you the information you seek, so whats the problem. Why is it most advisors do not have audited track records ?

The bottom line is you should not choose a financial adviors that does not have an audited track record. 

UP DATE:  I have moved my account to COMPAK ASSET MANAGEMENT who are currently outperforming the market each month since they have had my accounts.

If you have any experience dealing with Compak I’d appreciate them.