What is a Portfolio Tracker 

A portfolio tracker gives you a snapshot of how your entire investment portfolio is doing. So, in simple terms, if you have investments you want to monitor, you need a portfolio tracker.  

It’s common for people to track their investments using their online broker’s platform, their financial advisor reports or even a spreadsheet. 

However, modern investors are typically facing the following challenges: 

They may invest in different securities besides stocks: bonds, options, cryptocurrencies, NFTs, mutual funds or collectibles such as art, wine, cars or physical real estate. Furthermore, fractionalization has opened opportunities to invest in hedge funds, private equity funds or private debt. 

  1. They usually have more than one investment platform to monitor. This could be a mix of a pension account, a stock trading account, a crypto account and potentially alternative asset accounts. 
  2. They may not understand the broker’s or wealth manager’s portfolio reports as it is either too complicated or requires them to be read in a specific way.  

The core role of an investment tracker is to solve for the first and second challenge, making monitoring all your investments more convenient. However, solving for the third challenge becomes more nuanced. A portfolio or investment tracker should also help you to understand if your performance is on track to meet your future financial goals and why or why not.  

What should a portfolio tracker also do then? 

Aside from the convenience factor, a portfolio tracker should also allow you to: 

  • Connect automatically to your broker and manually upload investments 
  • Bring in your investment transaction data as well as your positions 
  • Allow you to add unlisted assets such as NFTs, real estate or collectibles 
  • See your total asset class exposure over time 
  • See your total geographic exposure over time 
  • See your total sector exposure over time 
  • See your total currency exposure over time 
  • Track your performance and P&L over time 
  • View the meta data on your positions and transactions 
  • Compare your overall portfolio performance against your benchmark 

Read our related blog: 6 reasons why every investor should use a portfolio analytics tool here.

Why do you need all of this?  

The more you are on top of your investments, the better chance you have of achieving your financial goals. For example, you may have a traditional 60/40 portfolio of stocks and bonds. Overtime, your stocks may underperform, and you find yourself with a 50/50 portfolio split because the value of the stocks have declined more than the bonds. A portfolio tracker that shows your net worth by asset class can keep you informed of this imbalance and prompt you to consider reallocating from bonds to equities to keep your original 60/40 mix intact. 

Similarly, you may have 25% of your stocks in tech but the recent sell-off may have dramatically reduced your exposure to this sector. Again, you can decide whether to address this imbalance by reallocating other positions into this sector, which is another way of dollar-cost averaging.  

For some people, income generation is a large part of their financial goals. They may be approaching retirement or have school or college fees to pay. They can use an investment tracker to analyze the sources of previous income in order to better predict future income expectations. 

What other features within an investment tracker could help? 

As a tool to help you achieve your financial goals, a good investment tracker can help you assess market trends and navigate stock market volatility. However, to help you think like a wealth manager, you could also benefit from a portfolio analytics system which can give you further insights into your risk and ESG amongst other things. 

There are many tools to help you track your investments and a simple Google search can help you find the most common ones. However, if you are looking for something that does that and gives you much more, then have a look at what illio can offer. 

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