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When I first started investing, my father-in-law, a longtime investor, gave me advice that echoes in my mind almost every day: “It is a business.”
At first, it sounded simple, maybe even boring. But the truth is, that advice has kept me from making a lot of mistakes. It runs contrary to the old adage, “Set it and forget it.” A business owner doesn’t forget their business. They know their numbers, track results, and adjust when circumstances change. Your portfolio deserves the same attention. After all, no one is more concerned with your financial future than you.
That doesn’t mean you have to do it all yourself. You can hire help—advisors, managers, planners—but remember what Jesus said about the hired hand: “The hired hand is not the shepherd and does not own the sheep. So when he sees the wolf coming, he abandons the sheep and runs away” (John 10:12-13). You can hire help, but you must oversee them.
Thinking of my portfolio as a business has shaped how I handle it:
• Strategy. Set goals, allocations, and a growth plan.
• Numbers. Track returns, dividends, and costs. Profit is what you keep after expenses.
• Risk management. Diversify like a business spreads risk across products.
• Growth. Reinvest dividends, stay educated, and focus on the long term.
Bad management can sink both businesses and portfolios, and I’ve been guilty of all of these mistakes: overtrading, overthinking, chasing fads, ignoring costs, obsessing over short-term swings, and neglecting periodic review. Activity without discipline is just noise.
The lesson is simple: manage your portfolio like the business you own. Show up, know your numbers, review your strategy, and oversee anyone you hire. You are the CEO of your financial future—and the success of your “company” depends on you.
I’m curious—how do you run your portfolio? Have you made any of the mistakes I’ve mentioned, or found strategies that work particularly well? Share your experiences—I’d love to hear what you as CEO of your company are doing with your financial “companies.”
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Great article, thanks.
In thinking about this topic, I tend to think that a degree of balance is required.
If someone takes no interest in their financial health, that is clearly a poor situation. But at the other extreme, analysing your portfolio daily, constantly making tweaks, trying to time the market etc. is also not a great situation.
I like that idea that several comments have suggested, to have a regular period for checking your portfolio and rebalancing as required.
I agree with your comment: “But at the other extreme, analysing your portfolio daily, constantly making tweaks, trying to time the market, etc. is also not a great situation.”
I would add: any of these are just bad business.
My goal, and I am getting closer, is 80% S&P 500 ETF like VOO and IVV. I am tired of bonds, and now do high interest rate web banks, like Ally and Marcus for my 20% cash. This cash is to tide me over, if I have negative years on the S&P 500. Simple, and over many years average about 10% gains. I am 80 and it is working for me. Remember Compounding helps YOU, while Inflation hurts you.
I dumped my Marcus in favor of Vanguard Federal Money Market Fund.
Why manage just your portfolio as a business?
Why not manage your entire “estate” as a business … that includes, but is not limited to, your portfolio?
Businesses have and manage real estate, financial capital, human capital, loans, equipment, taxes, insurance, budgets and other pieces that are similar to pieces of our lives.
Businesses have ratios- why not leverage personal credit the same ways that businesses do (loans to capital)? Ditto: Opportunity Cost?
However, doing that requires a different mindset: businesses are in business to make money and be profitable and execute accordingly. Households tend to run more on how things feel versus overall return.
Try stepping back and looking at everything, including your portfolio, and see how it fits in a business-like “Balance Sheet”. Are your decisions siloed in a vacuum or taken as part of the whole enchilada?
“What are some signs that an investor might be taking on too much risk or maybe playing it too safe with their allocations?”
“Well, again, I think it comes back to time horizon, and people can use age 50 as kind of a rough cutoff as to whether they should care about taking too much risk. I do sense that there’s a lot of complacency among older adults. They’ve had a great run in the stock market. [17 years since the last significant sustained economic downturn – Benz]. And it’s kind of a perverse thing. As we age and we become more battle-tested in terms of the ups and downs, we feel more risk-tolerant, but our actual capacity to absorb risk has gone down.” – Christine Benz, Morningstar October 2, 2025.
I think proper risk assessment is very important. Knowing one’s risk tolerance and risk capacity, for example. I did play it too safe after the Dot-Com bust. Or perhaps not. I was 54 and had nearly dug myself out of a very deep financial hole. My net worth was $5,315 with very few assets. I’ve read of those who own $millions in property but are high in debt. I wasn’t one of those and had few “assets” to speak of.
My strategy is simple. Set my asset allocation, invest in low cost mutual funds (mostly index), and practice benign neglect. Once a year, when I take my RMD, I decide whether to rebalance and maybe move the bond money around. When one of my CDs expires I buy another five year one. Has worked well so far.
I recently finished re-reading William Bernstein’s Four Pillars of Investing. Your strategy is consistent with the advice Bernstein offers in his book.
I’d say you’ve done well and should continue to do so.
My personal solution to the constant drumbeat in the media about US stock valuations reaching new heights was to lower my stock allocation to 50%, which consists of a mix of an international index fund and the broad US market. The other 50% is invested in short to intermediate Treasury bills and notes, and a money market fund, all housed in my roll over IRA. I will take my first RMD next year, and rebalance as needed. Your plan sounds both simple and sensible.
Thanks. My allocation is also 50% to stocks. I just checked, and it has reached 54%. If it’s still there when I take my RMD later this month I will rebalance.
Interesting post. For 25 years, I’ve called my personal financial management business ‘Cutler Enterprises.’ I publish an annual report at the end of each year (circulation: 1). I was first introduced to the concept of treating my finances as a business by a quirky old publication called ‘The Bottom Line’ that I used to subscribe to. I liked the concept, thus CE was birthed. Still solvent.
My first advisor was a nice guy, an honest guy I think, and a guy that worked for a crappy company, IDS. It didn’t take long to figure out most of their funds were 4th quartile bottom feeders with very high fees.
I then took over my investing, picking better funds with lower fees. However I still didn’t know about index funds, even though Vanguard’s S&P500 had been around for 10 or so years. And I wasn’t great with diversification.
By the late 80s my 401K was getting most of my investment dollars, and that was a good thing.
Today I use the same ETFs that most HumbleDollar contributors invest in.
I still have some cash to invest, once that’s complete all I should need to do is occasionally re-balance.