Investing properly is a full-time job, and that it would be very difficult for individual investors to manage their own money if they have other employment.
This leaves them two options:
- Do they manage their own money in parallel with their clients'?
- Has the size of the portfolio grown exceedingly large?
- What is the investment philosophy of the manager? Does it make long-term sense?
- For example, any manager can generate phenomenal returns within a certain period of time.
- Are the returns described over at least one full business cycle?
- Also, were the returns generated using leverage?
- Or were they generated despite the portfolio holding large amounts of cash (in which case risk is much lower)?