How do you evaluate your money manager?

[y4m]

We moved my retirement accounts out of basic target date funds and to an active manager in April of this year.  I'm looking at my account, and it looks like it has lost a small amount of value in that time (down about 1.5%).  In that same time period, the target date funds I had been in before the move are up about 4.5%.  Is this something I should bring up with him and ask for an explanation?  Is 5 months a long enough time period that this type of comparison is appropriate?

Any other tips for how you manage this are greatly appreciated!  

[SJ]

I do think 5 months is probably too short of a time frame to judge based solely on performance.

Have you asked for and seen long-term and short-term performance from the firm? Do you know how they have done in bull and bear markets? Have you gotten referrals from current clients and talked to them directly? Do you know WHY your accounts have lost value over this period? Do you understand what he is buying and selling and why?

ETA: I definitely don't think it would be at all inappropriate to ask for an explanation - my clients are truly welcome to call or email ANY TIME they have questions about anything. But I would try not to sound accusatory as 5 months is IMO way too short to criticize performance assuming you have done your due diligence in selecting this professional.

[njohnson1972]

Did your strategy change? For example, if your target fund was 60% Equities/40% Fixed Income, are you still allocated along the same lines? Or are you more aggressively allocated?

I personally think you need to understand your long term strategy and compare performance to the appropriate benchmark.