Caroline and I have a smallish sum parked with a money manager to basically balance out our broader portfolio in ways that i wouldn’t otherwise select myself — essentially someone who we pay to be more risk seeking and risk averse at the same time in order to offset my straight and narrow perspective. It leads to the strangest collection of bonds and international emerging markets funds.

Anyway, our adviser is selling off two bond funds for a small loss in order to move us into a different investment. I wonder whether financial advisers believe that removing a losing holding will make the portfolio look better when a client assesses how he’s doing via checking the current balances. Do clients quickly forget the historic loss where as if it was showing a negative situation each time i logged in, i might start to think “what am i paying this guy for?” That is, is there a bias here for these guys to sell losers too early in order to create an imaginary clean slate?