If you have an online trading account or even if you do not have an online trading account, you can still have an online portfolio tracker. You just need to feed in your equity portfolio and the portfolio algorithm automatically updates your portfolio prices on a real time basis. Even corporate actions like splits and bonuses are automatically updated in your portfolio. What exactly is the utility of this online equity portfolio?
The advantage here is that your transactions get automatically updated in the portfolio without any effort from your side.
Here are six ways to track your online equity portfolio and gain the maximum leverage of this facility.
Get your updated investment value and your updated net worth
Let us focus on your investment value first. Once your portfolio of equities and mutual funds is updated the real time price and the daily NAVs are updated automatically so that you can see the market value of your portfolio at any point of time. In fact, most portfolios will also give you an alert trigger if your portfolio is up or down and that alert can reach you by email or by SMS. Portfolio trackers offer you the facility of tabulating all your portfolio holdings including bonds, ULIPs, ETF and mutual funds, apart from the plain vanilla equities. Portfolio trackers are online, so you can access them anywhere and at any time either in the comfort of your laptop or better still on your mobile phone too.
It is not just about investment value, but it is also about your net worth. What do you understand by the concept of net worth? We are referring to the net investments and assets adjusted for your outside liabilities like home loans, personal loans, car loans, credit cards etc. You can even impute monthly EMIs into the portfolio so that you know your net worth in a realistic manner on a regular basis. It is also very simple when you need to provide a net worth statement to your chartered
accountant for business purposes.
You can easily evaluate your asset allocation and take decisions accordingly
Asset allocation refers to your mix of various equity, quasi equity and debt assets. Some portfolio trackers even give you the granular exposure to specific stocks by also adding your indirect exposure via mutual funds. This gives you a much more realistic mix of your exposure to specific sectors and themes. A host of analytics are also thrown in so that you can play around with the data on hand. This gives a more precise picture of where your risks lie and where your potential profits lie. The asset allocation pie chart also allows you to decide where you are overexposed and where you need to take profits of the table. The portfolio tracker ensures that the process of asset reallocation becomes automatic and system driven rather than too much of manual intervention.
It is useful to understand the critical shifts in the portfolio over a period of time
This is another important MIS that online portfolio trackers provide. You can understand how your exposure to debt and equity has gradually shifted over time. You can also set thresholds and alerts accordingly. It highlights when the exposure to a particular asset class is crossing a certain threshold due to the price appreciation / depreciation of various asset classes. For example, has the bull-run taken your equity exposure beyond your comfort level of 70%? You can immediately opt for portfolio
rebalancing in this case.
You get a one point picture of your book profits and your booked profits
It constantly keeps a tab on profits and losses implied in your portfolio. Your equity portfolio can be further subdivided into a trading portfolio and an investment portfolio. You can set different profit booking standards for these two classes of equity investments. The portfolio tracker also gives you clear signals on when you can use your value accretion to close out your loans and reduce your debt. That is the advantage of having your entire financial matrix in one single place.
Keep in touch with all the news, views, triggers and reports that matter
When you are holding equity and mutual funds you need to be alerted about relevant news and views. You can easily set alerts for news flows, dividend announcements, corporate actions, analyst reports, upgrades/ downgrades, rating changes, management changes etc. These conditions can be built into your portfolio and you will be intimated by email when these items are triggered. The advantage is that you do not have to worry about being deluged by a barrage of worthless information. You can fine tune your triggers in such a way that you only get the news and view that really matter.
Portfolio trackers are flexible and they can be exported for further analysis
Online portfolio trackers gives you a variety of MIS reports and detailed analytics which you can export and even print in an excel format or even in a PDF format that is non-editable. You can also file these reports on a periodic basis for your future review. When you have a financial plan in place and you need to discuss with your financial advisor, these MIS statements can be a good source document. Above all, these can be very useful input points for your annual tax filing and your
quarterly advance tax payments. Online portfolio trackers are flexible, smart and analytical. It is entirely in your hands how to make the best out of it.
Disclaimer: The above opinion is that of Vaibhav Agrawal (VP – Head of Research & ARQ at Angel Broking Ltd). Views expressed are his own.