How to Track Investments for a Healthier Portfolio This Season

Table of Contents

1. Key Considerations for Tracking Investments

2. The DIY Approach to Tracking

3. Track Your Investments with These Helpful Tools

a. For the Beginner
b. For the Active Investor
c. For the Hands-Off Investor

4. Aligning Your Portfolio with Your Goals

Your investments are a key component in achieving financial freedom, and keeping tabs on your portfolio’s health is crucial for understanding its performance. When you understand how your investments are performing in comparison to the market, you can adjust your approach based on your risk tolerance and individual financial goals. 

You might be curious about the best way to track investments, especially if you're new to the world of investing. The truth is, the right method will vary from person to person. However, by getting a handle on the latest trends and using the right tools, you can make smarter choices and hit those financial objectives. To help point you in the right direction, we'll provide an overview of what to look for and how you can keep all of your financial data organized.

Key Considerations for Tracking Investments

Tracking your investments goes beyond just checking your account balance. You should have a clear view of all your portfolio holdings, a way to monitor fees and overall expenses, and insights into your asset allocation. 

To truly understand your portfolio's health, focus on key metrics like capital gains, dividends received, and total return. Capital gains reflect the increase in your investments' value, while dividends show the income generated from your holdings. Total return combines both to give a comprehensive view of your portfolio's performance.

It's also important to compare your portfolio's performance against a benchmark index or relevant market average.. This insight helps you identify where your investments are underperforming or excelling, enabling you to make informed decisions. That said, carefully consider what kind of tracking method matches your needs and preferences. Whether you prefer a more hands-on approach or automated tools, a clear strategy is a crucial part of optimizing your portfolio.

The DIY Approach to Tracking

Using spreadsheets like Excel or Google Sheets allows you to customize the data you want to track, such as stock prices, dividends, and overall portfolio performance. This method gives you full control over what you monitor and how you analyze your financial data.

Regularly updating and analyzing your investment details will give you the information needed to make informed decisions for a healthier financial future. By manually setting up formulas and charts, you can easily visualize the trends and patterns you're looking for in your portfolio. This approach is ideal for those who enjoy digging into the details of each investment account and tailoring their tracking to specific needs.

Track Your Investments with These Helpful Tools

If you're looking for an alternative to setting up your own spreadsheets for tracking, it can be beneficial to consider tools like mobile apps or desktop software. Diversified investments across various accounts can make portfolio tracking especially complex.. Having the best apps at your fingertips can enhance your decision-making process.

Depending on what you're looking for out of a platform, here are some popular and highly recommended tools and apps for tracking your investments:

For the Beginner

Starting your investment journey can feel overwhelming, but the right tools can make tracking your portfolio a breeze. The key is to look for intuitive interfaces that simplify the process. Here are some apps to start with:

• Acorns: By automatically investing spare change from your purchases, Acorns makes it easy for beginners to start investing without much effort. It also offers a simple interface to track your investment growth. 

• Stash: Stash allows beginners to invest in fractional shares, making it accessible to start with small amounts. Their educational content helps make it easier to learn what to look for as your portfolio grows.

• Robinhood: Robinhood offers commission-free trading and a user-friendly platform, making it a great choice for beginners who want to track and manage their investments.

For the Active Investor

Active investors need tools that keep them informed and ready to act. This requires access to real-time data and advanced tracking features. These tools help you stay on top of market movements and track your portfolio's performance, allowing you to make informed decisions quickly:

• E*TRADE: E*TRADE provides robust tools for tracking and managing investments, along with real-time data and analysis, perfect for active investors who frequently trade.

• Interactive Brokers: Interactive Brokers offers a powerful trading platform with advanced tools and low-cost trading, ideal for active investors who need fast execution and a wide range of investment options.

• Fidelity: Fidelity offers a wide range of investment tracking tools and detailed reports, ideal for investors who need comprehensive insights into their portfolio performance.

For the Hands-Off Investor

If you prefer a more relaxed approach, tracking your portfolio doesn't always have to be hands-on. Maybe you want a more automated approach, focusing on long-term growth. The following provide updates and insights without requiring eyes on them at all times:

• Wealthfront: Wealthfront automates your investments, focusing on long-term growth by using algorithms to optimize your portfolio.. This is a great option for those who prefer a more "set-it-and-forget-it" approach.

• Betterment: Betterment provides automated investment management and personalized financial advice, making it easier to maintain portfolio health.

• Vanguard: If you're looking for low-cost index funds and ETFs, Vanguard helps you set up your portfolio and lets it grow over time without constant monitoring.

No matter where you are in your journey, these tools can help you stay informed and make better investment decisions. 

Aligning Your Portfolio with Your Goals

Your investment portfolio will need to grow and evolve to stay on track with your goals. With time, your goals, risk appetite, and market conditions will inevitably change. Also, it's important to note that diversification is not a one-time task. Checking and adjusting your portfolio regularly will help you keep the right mix of assets, especially as your financial situation changes.

How and when you should rebalance depends on your risk tolerance, the latest news about the market, and how far your portfolio has moved from its target. Are you saving for retirement, buying a house, or paying for your child's education? Your answer will affect how you invest and what types of investments and accounts you use, such as IRAs and 401(k)s.

Get the Investment Guidance You Need

Managing your investments well is important for reaching your money goals. However, it can feel challenging to do on your own. Getting help from a professional advisor can give you the skills and support you need to make the best decisions for your future. 

At Addition Financial, we're proud to offer our MEMBERS Financial Services. Our professionals can help you form an investment strategy that works for you. Through these advisory services, you make sound decisions tailored to your financial goals.