What Do You Call Your Portfolio?

 November 9th, 2015

If you are from the South you know that for generations people have given names to inanimate objects like farms and homes. You have all probably seen the TV ad where the woman has named her car “Brad”, and how Brad had been with her through thick and thin. For a long time estates have had grandiose names. I recently rented a beach house named “Timeless”, which happened to be on the same street as “Happy Hour”. This may be a trend that continues and I for one hope that it does.

As some of you know I have taken this naming issue to a new level. I believe it is perfectly fine to name your portfolio. Now, unlike a house or a car, a portfolio is not an inanimate object but I believe your portfolio is a living entity. It grows; it shrinks; it does not sit still.  It deserves a name.

In working with my clients, I like them to envision that their families are similar to small businesses. Each of the family members are shareholders of their small business. Typically the mother and father are the CEO and COO, with sons, daughters, grandchildren making up the shareholders each of whom benefits from the assets of the company (portfolio) which generates the cash flow that takes care of family needs. A family portfolio business has an income statement and a balance sheet just like a business. The assets that a family generates over time, hopefully grow and provide more support for the family.

This important, growing family entity might as well be called something. “My Assets” does not really cut it so why not consider naming your portfolio in the same tradition as naming a home?

The first portfolio I named was for my mother, a long time and conservative investor who favored bank CDs for her investments. As a result her portfolio did not generate the returns she needed during the long period of low interest rates. Over the course of a couple of years I helped her changed the portfolio completely such that it was more income focused. During this process I realized that it would be easier to discuss the portfolio with her if it has a name.

The naming process was not easy as we went back and forth on ideas but eventually we settled on one that she felt best described my relationship with her during this process. The chosen name was GOBAM, an acronym which stands for “Good Old Boy Asset Management”.

So if you like to give a name to your house or your car why not name your portfolio? It sounds much more personal when I say to my wife that RAMCO (the name of our personal portfolio) was up or down this week rather than saying “our assets appreciated in value”. When I mentioned this concept one of my daughters immediately knew what to call her portfolio, ” I Need More Money” was the first thing out of her mouth.

Carl Gambrell