Should you follow your wealth advisor's recommendation?
Examine the proposed action, its supporting evidence, its costs, and what it changes in your portfolio.
Inspect a completed review below.
Start with the actual decision.
Ask your advisor to explain the objective, supporting evidence, costs, alternatives, and conditions for revisiting the recommendation. Compare those answers with your holdings, time horizon, and constraints.
What are you deciding?
What did your advisor recommend?
Inspect a completed recommendation review.
Merck & Co., Inc. is worth about $102.23 per share against a $145.95 price (-30%), so the shares look Overvalued.
| Question | Evidence reviewed | Assessment |
|---|---|---|
| Are the factual claims supported? | SEC EDGAR (via Polygon) | Supported by SEC EDGAR (via Polygon), covering the filing dated 2025-11-05. |
| Does the arithmetic reconcile? | 5.1% risk-free + 0.13 beta × 5.5% equity risk premium | The supplied inputs produce 5.82%; the argument states 6.10%. |
| What forecasts are required? | Trailing 4-year revenue CAGR of -8.8%, faded toward terminal growth over 5 years. | This result requires revenue growth (yr 1) of -8.84% over 5 years. |
| What does it change in the portfolio? | Model value vs price (-30%) | A valuation difference is not a predicted return. The recommendation does not specify a holding period or maximum position size, which are needed to assess the decision. |
Open the original recommendation
Take specific questions back to your advisor.
- · Which observation would change the 6.10% discount rate?
- · What evidence supports -8.84% revenue growth next year?
- · What position size and holding period does this assume?
- · What would the value be if free cash flow came in 10% lower?
Keep the recommendation and its next review together.
Create the review, save your reasoning, and follow the assumptions that could change your decision.
Can I review advice I already followed?
Yes. Preserve the original recommendation and date, then compare its premises with subsequent evidence and your current decision.