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To defend your portfolio, all you really need is a sincere desire to learn from your experiences (both good and challenging), and a willingness to confront the hidden assumptions and biases that lie behind your own financial behaviour. (Jupiterimages/Photos.com)
To defend your portfolio, all you really need is a sincere desire to learn from your experiences (both good and challenging), and a willingness to confront the hidden assumptions and biases that lie behind your own financial behaviour. (Jupiterimages/Photos.com)

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One of the most intriguing aspects of belonging to TIGER 21 (a peer-to-peer learning and networking group for high net worth investors/entrepreneurs) is participating in the “Portfolio Defence.” Once a month, one member opens up their portfolio, showing their holdings to their 10-plus fellow group members, sharing their broad-level approach to money and wealth, answering questions and receiving fellow member feedback.

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Over the past few years, I’ve attended over 100 TIGER 21 portfolio defences and I’ve come to see them as one of the most valuable learning experiences a wealthy investor could ever go through. So much so, that I believe every investor should experience one, no matter what their net worth.

Of course, you don’t have to be a TIGER 21 member to to ask yourself some of the hard questions that TIGERs ask while reviewing a portfolio. In fact, you don’t even need a group of friends or fellow investors to go through the defence with you. All you really need is a sincere desire to learn from your experiences (both good and challenging), and a willingness to confront the hidden assumptions and biases that lie behind your own financial behaviour.

The intention is to put the person on the “warm-but-not-hot seat”: to respectfully grill them about their investment holdings, to press them about their investment rationale, to shake them out of their complacency, and to challenge the hidden assumptions in their portfolio. I’ve heard members confess that the process is a little challenging at times. It’s not easy putting yourself out there, and being respectfully viewed by your peers. But make no mistake – there is tremendous benefit from it.

The typical TIGER 21 portfolio defence is pretty extensive, running about an hour and a half. Whatever is discussed within the room stays in the room (every member is under a strict (and legally binding) confidentiality agreement) in order to create a safe place where people who are used to rarely talking about money can actually talk about their wealth with peers.

The defence usually covers the following topics:

  • The qualitative story – the individual’s background, passions, motivation, lessons learned, etc. (15 minutes)
  • The quantitative story – the individual’s net worth statement; asset allocation mix; investment and manager performance; wealth timeline, etc. (15 minutes)
  • Clarifying questions and requests for additional information from the group. (20 minutes)
  • “Care-frontational” feedback and suggestions from the Group about possible improvements and potential blindspots. (20 minutes)
  • Next steps – what decisions and actions the individual needs to take in order to be accountable to themselves as a result of this discussion. (20 minutes)

Before the Defence, each TIGER 21 member must complete a 12-page questionnaire (with help, of course), which helps clarify some of their ideas and provides focus for the discussion to come. Many of those questions concern the nuts and bolts of wealth management. Others cover the individual’s idea of wealth: what role does wealth play in the individual’s life, what purpose does it serve, and so on.

Here are some of the questions included in the qualitative part of the questionnaire:

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