An investment portfolio tracker is necessary, especially for people with investments scattered across several platforms and asset classes. How do you ensure you stay up-to-date and on top of your investments and their performance? You could either use a spreadsheet or automate the process with an investment portfolio tracker.
Most investors often start with a spreadsheet and upgrade to a portfolio tracker that automates the process. But there’s still a significant number of people who don’t understand online portfolio trackers and why to use them.
What is an online portfolio tracker?
It simply means an application that helps you keep track of all your assets including stocks, cryptocurrencies, cash and other assets in one place.
A lot of portfolio trackers often cater to one asset, like a platform that only tracks your cryptocurrencies; investors can track multiple assets on only a few.
Examples of portfolio trackers
- Achee: You can track all stocks, cryptocurrencies, cash and fixed assets in any currency. They allow you to also nominate a beneficiary for your assets in case of eventualities. Suited for investors who have or invest in multiple assets.
- Delta App: You can track cryptocurrencies and also get market analysis on cryptocurrencies. Suited for investors that invest only in cryptocurrencies.
- Sharesight: You can track stocks and a few cryptocurrencies. Suited for investors that have only invest in stocks.
Importance of an Investment Portfolio Tracker
Complete understanding of how much you own at any given time.
Most investors should have a diversified portfolio. Building an investment portfolio that consists of diversified investments is necessary to get good returns with minimum risks.
Having a diversified portfolio means you are most likely going to have your assets on different platforms. There’s hardly any platform that allows you to invest in real estate, agriculture, stocks, bonds and other assets. How do you now ensure you know how much you have and how they are performing at any given time? You need an automated investment portfolio tracker.
It helps the understanding of your portfolio allocation and improves the quality of your investment decisions. Also, your financial life becomes organised to give you peace of mind.
Monitor asset allocation
Investors often get into the mindset of invest-it-and-forget-it when it comes to their portfolio. However, that’s risky.
You should plan to rebalance your portfolio regularly; quarterly or every 6 months. For example, the stock market goes through a period of volatility and your portfolio allocation might be out of wack if you don’t regularly check it. Here’s where a portfolio tracker comes in handy to show your asset allocation, making it easy to see when it’s time to rebalance your portfolio.
If you check your allocation bar and see that one of your holdings is taking up a massive percentage of your portfolio, it may be time for some rebalancing by taking some profit and buying another under-represented asset.
Automatic calculations of dividends and stock splits
If you’re already using a spreadsheet to track your investments, I’m sure you would find it difficult to account for corporate actions like dividend and stock splits.
Most investment portfolio trackers have a dividend tracker and automatically update your portfolio for you. The platform can access that information on stock exchanges and automatically help you account for it in your stock portfolio.
Track portfolio in your preferred currency
If you are investing in a currency, let’s say USD, which is different from your home currency, it’s important to track the currency risk and the amount you have gained or lost from exchange rate differences.
In Africa, you would most likely be investing in Dollars, which is different from the money you spend daily in your home country. An online portfolio tracker can help you track these different investments that are done in another currency and let you see the currency gain or loss at any given time.
In conclusion, while using a spreadsheet investment tracker might be good for some time, you should look towards upgrading to an online investment portfolio tracker to get the best out of your investing activity. It certainly helps improve your investment decisions.