How scoring works
Every holding gets a score from 0 to 100. Higher is better. The score answers one question: is this a good way to own what you own?
Green, amber, red. That's most of it
- Fine75–100Working well. Leave it alone.
- Worth a look50–74Not urgent, but check it.
- Losing money0–49Fees, risk, or idle cash.
If everything is green, you're done. The answer to “am I ok?” is yes. The rest of this page explains what makes something red.
Each holding is checked for the one problem it can have
Portfolios rarely lose money in dramatic ways. They leak it: through fees, through too much riding on one company, through cash earning nothing. Each type of holding gets checked for the leak that applies to it.
Are you overpaying?
Cheaper funds score higher. It's that direct.
Two funds can hold nearly the same companies while one charges twenty times more. On $20,000, that's $165 a year instead of $9, for the same thing. That's the main thing we score a fund on, because it's the one cost you can always avoid.
Is too much riding on one company?
Shares inside your funds count too.
A stock that's a small slice of your money is fine. Up to about 10%, it scores 100. Past that, the score drops as the slice grows, because one bad year at one company starts to hurt everything.
Is your cash earning anything?
Compared with what a T-bill fund pays today.
Cash sitting at 0% while Treasury bills pay 4% is a hidden fee on every dollar parked there. Cash earning close to today's rate scores well.
A great company can still get a terrible score
The score doesn't grade the company. It grades how you own it.
It still scores 2, because it's 38% of this portfolio. The problem isn't the company. It's that so much depends on it.
And a strong run can never cancel out a warning about fees or size. If it could, every expensive fund and oversized bet would look fine right after a good year, which is exactly when they're most tempting, and most dangerous.
Your score follows your money
Your total isn't a straight average of your holdings. Each holding counts in proportion to the money in it, so your score follows where most of your money sits.
Most of your money in the healthy one
Most of it in the struggling one
Same two holdings both times. Only the amounts changed.
If we don't have the data to score something honestly, we leave it out and tell you. We never guess.
Your household score isn't an average of your accounts
When we score your household, we pour every account into one pot and score the pot, as if all of it were a single portfolio. We don't average your account scores.
That's why one account can score terribly while your household stays green, and both can be right. A stock that's half of a small account is a real problem inside that account. Measured against everything you own, the same stock might be 1% of your money, and 1% riding on one company is fine.
$10,000 is half of the account's $20,000
$10,000 is about 1% of your $750,000
Same stock, same dollars. Only the pot it's scored in changed.
Only the too-much-on-one-company check softens like this. An expensive fund or cash earning nothing looks exactly as bad at the household level. So a green household with a red account usually means one thing: the problem is concentration inside that account, not fees or idle cash.
Wondering why you should trust any of this? Where the idea came from, how we pick the funds we name, and why nothing here is pay-to-play: Why trust this