One of the most common complaints from those who manage investment portfolios themselves is keeping track of all their holdings and investments. Most investors have holdings across several different accounts. As a result, it can be very difficult to stay on top of the performance of their asset allocations at any given time. What not everyone knows, though, is that there is a solution for these issues. A portfolio analyzer works to help manage investments and improve their performance, helping you adjust as necessary.
There are a handful of very effective portfolio analysis tools that analyze your holdings in multiple accounts. These can give you an accurate view of your investment situation. In other words, these portfolio analysis tools will help you do exactly what you don’t have the time or bandwidth to do. And that is, they keep track of and monitor all your holdings.
In this article we will discuss the advantages and disadvantages of using a portfolio analyzer. We will also spend some extra time looking into one particular portfolio analysis tool — Portfolio Visualizer.
It can be difficult to sift through the specific differences in these portfolio analyzers. Finding the right portfolio analyzer for you will also, of course, depend upon your personal financial goals, retirement plan, investment objectives, and more. We hope this overview will help you make a decision on which one is right for you and your investment portfolio.
Tools that Work as a Portfolio Analyzer for Your Investment Management
Let’s start with Personal Capital. Personal Capital has several advantages right off the bat — it’s free, it works on PCs and smartphones, and you can set it up in just a few moments. All you have to do is download your investment portfolio onto the app or website. The software even lets you connect credit cards and bank accounts.
Personal Capital is especially adept at providing a high-level visualization of your portfolio. The investment assistance itself is fairly basic, but Personal Capital makes up for this in its ability to give you an overview of your entire personal capital and financial situation.
And they do this with their Investment Checkup Tool.
The Investment Checkup Tool
The Investment Checkup Tool serves as a sort of chart that makes it extremely easy to visualize your portfolio composition. It breaks your portfolio into several categories (stocks, bonds, etc) and is an easy way to see how you have divided your investments into various asset classes.
The Investment Checkup Tool also looks at your current asset allocation in comparison to your target asset allocation. The software also has numerous ways to help you assess your risk and return ratios. It compares your current risk situation to your target risk comfortability and makes recommendations on how to make your actual risk levels balance with your target risk levels. It also makes suggestions on ways to keep your asset performance the same while reducing risk.
Personal Capital has many other advantages. In addition to the services we have described, the software also offers a retirement planner that helps you stay on top of your retirement goals.
There are, of course, some disadvantages.
Although the Wealth Management Service can be quite helpful and affordable for investors looking for professional advice and support, the free price tag means that you will be solicited to join their premium Wealth Management Service. This shouldn’t be a deal-breaker though — they generally only target high net worth investors. And if you don’t take them up on their offer after the first few solicitations, they generally leave you alone.
The other major disadvantage to Personal Capital is that the investment analysis and tracking tools they provide are not as developed as some other portfolio analyzers. There is not much insight into stock market volatility, or as many ways and metrics with which to track your investments.
Morningstar comes in two different forms: Morningstar Portfolio Manager and Morningstar Instant X-Ray.
This Portfolio Manager is free and is most acclaimed for its excellent insight and advice regarding mutual funds, exchange-traded funds (ETFs), and of course stocks. Like Personal Capital, Morningstar makes it very easy to import your financial data. You can either manually enter or download your investments into their software. Afterwards, they will start their portfolio optimization service.
Morningstar Portfolio Manager stands out for the various tools it offers for portfolio analysis, some of which screen stocks and mutual funds. You can also filter your searches according to your personal financial situation or objectives, price, changes among assets, and more.
Like Personal Capital, this Portfolio Manager also provides a high-level visualization of your portfolio. It even helps investors to see how their assets are allocated.
Morningstar Instant X-Ray provides, as expected for a premium service, even more tools that you can use to analyze your portfolio. Their x-ray tools are so plentiful and effective, in fact, that other portfolio analyzers use Morningstar’s software to conduct their analysis and reporting. And not only does the Instant X-Ray have a wide range of tools, their tools are very good. In fact, they have a proven track record of providing excellent information, analysis, and advice on many investments, but especially mutual funds.
Advantages and disadvantages
Both Morningstar Portfolio Manager and Morningstar Instant X-Ray have advantages and disadvantages.
Both the free and premium versions offer excellent data analysis and insights. Even the free service provides excellent and easy-to-understand advice on funds. And the premium service provides expert and professional-grade analysis that is not generally available to the general public.
The biggest disadvantage to Morningstar Instant X-Ray is, of course, the fee. It is $199 annually, placing it on the very high end of portfolio analysis software. One upside to this is that you can sign up for a 14-day trial to see if you want to invest in Morningstar’s premium service.
Also, if you want a portfolio analyzer for investment tracking purposes only, then this tool may not be the service for you. This is because it is much more geared towards analysis.
Portfolio Visualizer as a Portfolio Analyzer Tool
And lastly, let’s discuss Portfolio Visualizer. Portfolio Visualizer is one of the most dynamic and technical portfolio analysis tools on the market. It is surprisingly robust for a mostly free software program available to anyone.
This being said, it is more geared towards experienced investors. This is because many of the concepts and tools it offers are advanced concepts (with little explanation) that less experienced investors may be unfamiliar with.
One of the most important services that Portfolio Visualizer offers is the option to backtest portfolios. You can perform as many as three asset allocations at a time, and the backtesting software goes all the way back to 1972.
Some features of Portfolio Visualizer
Portfolio Visualizer can serve virtually any function you want it to. If you want an aggregation of your portfolio it can provide this. It also has tools to run adaptive allocations, factor analysis, Monte Carlo simulations, various types of portfolio optimization and so much more.
In addition, the program also has analytics on practically any asset class you can think of, including:
- foreign and domestic stock classes
- fixed income classes
- alternative assets such as real estate trusts
Portfolio Visualizer could be a great option if you are a knowledgeable investor and want to explore many different tools to manage and analyze your portfolio.
Are you fairly new to investing though, or uninterested in adjusting and analyzing your portfolio? You may find the software may be overwhelming and unnecessary.
We defined Portfolio Visualizer as “mostly free” above because the free plan still provides almost all of the tools and analytical options. However, it does not give you the ability to import your portfolio. This is both an advantage and disadvantage. If you want to import your portfolios it costs $19 per month.
At the same time, a major advantage to Portfolio Visualizer is the Monte Carlo simulation and backtesting. These are tools that are very useful and not commonly available.
Not looking for an extremely technical platform offering mostly quantitative data? Then this may not be the program for you.
On the flip side, for experienced investors looking for an online portfolio analysis tool Portfolio Visualizer could be perfect. Some of the other tools on the market may be overly basic and not dig deep enough for you. Additionally, Portfolio Visualizer is good for analyzing your allocations for quite awhile.
We Can Help
There are few things that affect as many areas of your life as your wealth. Thinking about retirement, estate, or financial planning? Or will you use your wealth to provide for legacy or charitable purposes? Proper wealth management is what will make it happen. And an investment adviser is the right person to help.
At Saddock Wealth, our years of wealth management experience can help guide you toward financial prosperity. Schedule a meeting here, and we’ll discuss your best options.