Whenever we try something new, the excitement of getting started frequently overtakes us. We begin with unrealistic expectations and end disappointed. The investing experience of many people follows this unfortunate pattern. If you’re in this situation, how do you react?

Instead of blaming and pouting, the mature person finds a way to improve. After all, a live dog is better off than a dead lion, as the Ecclesiastes say.

Before I do a portfolio report card for J.W. in Nashville, Tennessee, here’s some background on him: He’s 48-years-old, married and works in the health care field. His 403(b) plan is worth $204,899 and it contains 18 mutual funds. He’s saving around $12,500 annually.

J.W. explained to me that one of his greatest fears is not having enough money to retire. Who of us doesn’t identify with that fear? His retirement plan has a brokerage window, which gives him access to a wide variety of investments. He’s been choosing mutual funds within his 403(b) plan with the help of a mutual fund newsletter service and told me he’s been dissatisfied with the results.

What kind of portfolio report card does J.W.’s retirement plan get? Let’s evaluate his investments in five crucial areas before I assign him a final grade.

Diversification. Satisfactory portfolio diversification is never about how many holdings you have, but rather how well your holdings are distributed across a variety of different asset classes.

It’s good to see that J.W.’s retirement portfolio has exposure to both domestic (Oakmark Fund) and international stocks (Artisan International Investor), bonds (Loomis Sayles Bond Fund), and real estate (AMG Managers Real Estate Fund). He’s also made an attempt to own small-cap stocks (Baron Small Cap Fund) and value stocks (Croft Value R Fund).

But his portfolio comes up short on lack of exposure to other key areas like emerging market stocks, commodities and cash.

Also, none of the 18 mutual funds he owns in the other areas are broad and acceptable proxies for those asset classes. His diversification needs to improve.

Risk. Deliberately overweighting your portfolio in a certain asset class, individual stock, or exchange-traded fund for strategic reasons is one thing. But when that overweighting happens inside a portfolio by accident or without purpose, it becomes problematic.

In J.W.’s case, he has 97.3 percent of his money in stock funds, 1.5 percent in real estate securities, and 1.1 percent in bonds. Is this by design or by accident? Needless to say, J.W has a hyper-aggressive asset mix. This is true even for a 48-year-old aggressive investor who, as J.W. told me “needs to make as much money as possible.”

The risk characteristics of a portfolio should always be 100 percent compatible with not just how we want to invest our money, but our age and life circumstances.

Cost. Nobody can control the direction of interest rates or how the stock market will behave. But what we can control is how much our investment portfolios cost. Simply put, paying less results in more money over the long run in your own pocket.

J.W.’s three largest holdings, Artisan International Investor (international stocks), Oakmark Fund (large-cap stocks), and American Beacon Large-Cap Value Fund (large cap value stocks) account for 51.5 percent of his portfolio and charge annual expenses between 0.9 percent up to 1.2 percent. The rest of his portfolio gives little attention to minimizing fund fees. I estimate the total annual cost of his portfolio to be 1.1 percent.

Tax-efficiency. The money inside J.W.’s 403(b) plan, like other retirement plans such as 401(k), grows tax-deferred. He doesn’t have any outstanding loans or premature distributions and I didn’t observe any problems in the overall tax liabilities of his plan.

Performance. After deducting J.W.’s annual contribution, his retirement plan grew from $173,000 in August 2013 to $192,399. That’s a 1-year return of 11.2 percent compared to a 15.9 percent gain for blended portfolio of index ETFs matching his asset allocation.

J.W.’s underperformance, relative to our yardstick at a time when stocks have performed strongly, and for a portfolio that is heavily concentrated in stocks, is unacceptable. He has every right to be disappointed.

Summary. The final portfolio report card grade for J.W.’s 403(b) is “D.” He joked with me that he was going to get a “double F minus.” The good news is that he beat his own depressed expectations. The bad news is he got a “D.”

But even with poorly designed investment plans, I always try to find one positive portfolio quality. It allows a person something to build upon. J.W. is definitely a good saver, he has the motivation to be a better investor and his portfolio’s strongest area is diversification.

Cutting excessive risk, minimizing investment costs and tweaking his diversification are good places to start. If J.W. tackles these weaknesses within his retirement plan, I’m confident sustainable and satisfactory performance will follow.

Ron DeLegge is the Founder and Chief Portfolio Strategist at ETFguide. He’s inventor of the Portfolio Report Card which helps people to identify the strengths and weaknesses of their investment account, IRA, and 401(k) plan.

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Portfolio Analysis: A $200,598 Retirement Plan Strikes Out originally appeared on usnews.com