7 Tips to Intelligent Investing: Track the Performance of Your Investment

When it comes to keeping track of the success of your investments, or investment tracking, it’s natural to feel overwhelmed and unable to see the larger picture. Regardless of the size of your assets, it’s critical to understand how close you are to reaching your objectives, how much you’re paying in fees, and how to alter your portfolio.

Most investors limit portfolio risk through asset class diversity in order to maximize profits. Diversification decreases risk within each asset class because each has various cash flows and varying degrees of risk. When you combine this with juggling various investment accounts, it’s evident that keeping track of what’s going on in your portfolio is both vital and difficult. 

Tracking progress is thrilling and makes financial sense because it is the only way to optimize your investing strategy. With this in mind, inventive solution providers have created apps, online tools, and services to assist investors in better understanding their portfolios. To track the performance of your investments and maximize your returns, use a combination of these tools and the accompanying advice.

1. Using an App to Track Your Investments  

You’re unlikely to remain static for more than a few hours, and neither will the performance of your investments. There is an abundance of investment tracking applications available thanks to clever app developers in the ever-evolving fintech field.

You can use an app to connect your investments and instantly discover how you’re doing with easy, actionable insights derived from large amounts of data. Find out if the fees you’re paying are excessive, and what constitutes acceptable annual performance.

You can such apps to track and manage your current bank accounts, credit card accounts, and investment accounts all in one spot. Some of the applications are free to download and use to track investments, with the option to upgrade to premium access to intelligent insights on how to improve your investment performance.

Some portfolio tracker tools provide a picture of how well an investor’s portfolio is performing – for tracking on the go, glancing, and ease of understanding – by breaking down the week’s top movers and newest portfolio news. It should be noted that these trackers just provide comparative statistics on how a portfolio is performing and do not actively manage a portfolio.

2. DIY Spreadsheet Tracking

For whatever reason, you can always use Excel or Google Sheets to keep track of your investments instead of the apps and large data they rely on. Customizing your own spreadsheets requires far more effort than utilizing pre-existing software; yet, the extra benefit of being customizable is crucial for investors seeking precise progress reports.

Spreadsheets can also be used for investment computations and estimates. You may discover your projected wealth and plan for the future by using formulas to calculate dividend income and forecast performance over time. Spreadsheets are very useful for tracking and comparing data. They can also consolidate your investing history.

Excel, with its outstanding data and data analysis capabilities, maybe a useful tool for tracking your investments. Consider the following investment tracking formulas:

  • =DAYS – to calculate the number of days between two dates; to show your portfolio over time
  • =AVERAGE – computes the average of a set of numbers =MAX and =MIN – extract the maximum and minimum numbers from a set

Google Sheets is simple to use and only requires internet access, as opposed to Excel’s file and application download requirements. Google Sheets includes a “finance” function that includes a list of useful formulas such as the following:

  • ACCRINTM calculates the accrued interest security pays at maturity
  • INTRATE calculates the effective interest rate

3. Regularly Reviewing Portfolio

In fact, standard reviews will not be enough. It is critical to monitor the success of your investment on a regular basis. That is, you should set aside time each week to evaluate and track your financial portfolio.

It is critical to check in on a regular basis to ensure that the stocks in your account are still serving your investing objectives. It’s also critical to consider whether you’re still comfortable with the risks, fees, and liquidity of your investments at any particular time. Checks on your brokerage firm’s files about your accounts, margin account agreements, discretionary account agreements, option account agreements, and ensuring all information appropriately reflects your personal data should be part of this review.

4. Make use of Investment Tracking Software

Installing software on your system can provide you with access to features not available through online programs. Many investors who demand specialized tools will choose their program – but this tracking technology isn’t only for professionals.

Sophisticated investors, as well as accountants who are familiar with Generally Accepted Accounting Principles (GAAP), will most likely utilize standard accounting software to manage their investment assets, such as QuickBooks, which is available in a variety of tiers and pricing.

The software program Fund Manager is the closest thing to professional investment tracking for ordinary investors. It keeps track of and displays information such as interest accrued, coupon dates, and yield to maturity. It is especially effective for individuals who invest in municipal or corporate bonds.

5. Make use of Budgeting Tools 

Perhaps less immediately concerned with how your investments are performing, but crucial when it comes to meeting your investment objectives. Your investment tracking plan should include online budgeting tools, applications, and software.

To begin, Personal Capital is an online application that can be used to track budgets, credit cards, investments, and nearly anything else. The design is simple and quick to use, and it provides visually appealing and easy-to-understand information about how you spend your money and how your investments are performing.

The all-in-one financial dashboard allows you to establish, manage, and track your budget so you can keep track of your expenses and how they affect your overall investing strategy.

6. Determine your Performance Drivers

Intelligent investing necessitates a keen awareness of what factors contribute to your gains. It is critical to assess which investment decisions resulted in the highlighted drivers. Develop such items to validate exactly what’s driving your portfolio. Recreate wealth by adhering to best practices.

It should be stressed, however, that underlying exposures should not be overlooked. Keep in mind that the external factors influencing asset performance may change. In fact, nothing remains constant in the ever-changing financial sector (and all other realms affecting it, such as the political, social, and environmental).

7. Establish Portfolio Benchmarks 

After determining your investment strategy, you will require benchmarks to guide your progress. Set up weighted benchmarks that correspond to your goal allocation. To track investment progress, compare your assets on a regular basis to your relevant benchmarks. It is also beneficial to track your total cumulative success against the many benchmarks established in your strategy.

Benchmarks are also a useful investment tracking tool for evaluating actively managed funds, as their success is measured by how well they exceed their underlying index. However, be wary of over-reliance on benchmarks, as investing should be about attaining goals rather than competing. A portfolio should outperform its benchmark, but this does not guarantee a comfortable retirement.

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