5 Benefits of Using a Portfolio Tracker

5 Benefits of Using a Portfolio Tracker

As a retail investor, it is essential to have a strong overview and understanding of your positions. There are many methods available to track your investments. Some investors will take a manual approach and develop complex Excel spreadsheets. Others may rely on the tools provided to them by their investment platform.

While actively managing your portfolio is a great start, doing it yourself or depending on the free services provided by brokerage houses has its limits. In today’s post, we examine the five benefits portfolios offer conventional tools may not.

What is a Portfolio Tracker?

Before we dig into the benefits portfolio trackers offer, let’s define what a portfolio tracker is and isn’t. The name itself is relatively self-explanatory. But under the hood, there’s more going on than just updating you on whether your balance is up or down on any given day.

Portfolio trackers are online and mobile software solutions that bring together investment data from all your investment accounts. This information is presented to you in an easily digestible manner. Most trackers are designed to keep you abreast of your performance without the need to visit multiple websites or individual positions.

Portfolio trackers offer investors the opportunity to ensure their holdings perform in step with their overall financial goals. Additionally, your performance can be measured against industry benchmarks.

#1 All Holding in One Place

For all the benefits portfolio trackers provide, their ability to display all your holdings in place is why many investors utilize them. In addition, many investors will have positions held in different accounts. Such accounts may include employer retirement plans, individual retirement accounts, or personal brokerage accounts. Instead of logging into multiple broker websites, a portfolio tracker provides a view of your investments in one place.

#2 Performance vs. Goals

Investors have goals, usually to make money. However, with multiple accounts and positions, it can be challenging to feel comfortable if your goals are being met. A portfolio tracker can aid in ensuring your strategies are keeping pace with the objectives you set out to achieve. Warnings can be set if your performance is slipping behind or if you’ve exceeded your goal and should take profit. With all your investments in one spot, you can see which accounts are working and those that may need your attention.

#3 Keep Up with the Jones

By Jones, we mean the market benchmarks. One of the reasons individuals take the reins of their investments is they believe they can perform better than their investment peeps. As a result, many portfolio trackers include data from the major indices and industry benchmarks. This information provides insight into whether you are performing well during different market conditions or if your strategy needs tweaking.

#4 Manage Investment Costs

Let’s face it; everyone wants to make money in the market, including fund managers and plan managers. So, some portfolio trackers can breakout the fees being charged against your investment accounts. Understanding the fees allows you to rotate into similar investments with lower charges to improve overall returns. Managing investment costs can put thousands of dollars back in your pocket in a market where every point matter.

#5 Stay Informed

Depending on the portfolio tracker, news feeds specific to your investments can be streamed in real-time. Although trackers are best suited for the buy-and-hold investor, having access to breaking news could provide new trading opportunities or help avoid a cataclysmic disaster. If access to financial information is important, make sure your tracker offers ways to choose the type of content received and how often.

Bonus: Remain Focused

One of the unsung benefits of a portfolio tracker is the reduced need to check in on your accounts regularly. Setting up alerts tailored to your investing goals and objectives means there is no reason to look at your accounts daily. This is especially beneficial for the passive buy-and-hold investor (1) who wishes to alleviate the stress of looking at account balances regularly.


1) https://www.investopedia.com/terms/b/buyandhold.asp

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