Portfolio management software is different from portfolio management, even though they have the same name. While true portfolio management involves financial professionals investing money on your behalf, asset allocation tools and portfolio management software are simply a way to keep track of your financial life. Modern portfolio management software often offers advanced statistics and analytics to help you fully understand your entire financial situation.
Here’s what portfolio management software is, how it works, what features and benefits it offers, and whether or not you should use it.
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What is portfolio management software?
Basic portfolio management software allows you to track and maintain all your individual financial accounts and investments. Advanced versions offer asset allocation tools to help you optimize your investments. Regardless of the software you use, you should be able to consolidate all your financial information into one program. This allows you to see at a glance how all your different accounts interact with each other.
The best programs give you ways to integrate and analyze all this information so you can see where you might need to make adjustments to keep everything in balance. For example, a good software program can tell you which of your accounts are performing well and which may be underperforming.
Here are some of the additional features to look for in a top-tier software program.
Key features to look for
In addition to simply listing all your financial accounts, the best portfolio software management companies offer the following types of services:
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Data integration from multiple sources: Because many investors have multiple accounts at different depository institutions and/or financial service providers, a good software management program can collect data from any number of sources.
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Portfolio tracking: The primary function of most portfolio management programs is to track investor portfolios. This includes everything from current assets to historical transactions. The best ones contain extensive information about portfolios, such as cost basis, yield and profit/loss.
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Customizable reporting: Every investor is different, so a good portfolio management software program is customizable. Whether you want to change the appearance on your computer or app, choose different data to display on the front page, or simply want different colors or fonts, the best programs are flexible enough to meet your needs and preferences.
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Investment analysis: The best portfolio software not only lists and tracks your investments, but also analyzes them. While most programs don’t do things like make buy and sell recommendations, good programs will analyze how an investment is performing relative to a certain degree of risk, whether it is above or below your target asset allocation, what analysts are predicting for its future , and so forth. on.
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Risk analysis and management: High-quality portfolio management programs provide comprehensive risk tools to help investors get the maximum return from their portfolios with the least possible risk. At a minimum, you should look for programs that provide alpha and beta for your portfolio, which measure an investment’s performance relative to an index and its volatility, respectively.
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Cost reporting: Tax planning is an important part of investing. One of the most useful features of good portfolio software is the ability to track the amount you paid for each of your trades. This makes it easy to report the gains or losses you make on each trade when you report your taxes. It can also help you plan your trading strategies, as you may want to harvest losses on certain positions or hold your investments until you can take advantage of long-term tax rates on capital gains.
4 Best Portfolio Management Software Programs
The best portfolio management software program is the one that provides the information and services you need most. So there is no one ‘best’ program for everyone.
Here’s a list of some of the most popular portfolio management software programs, including their features and benefits, so you can choose the program that’s best for you.
Quicken Premier
Quicken Premier is one of the original portfolio management tools and has grown into a full-service program. Here are some of the key features of Quicken Premier:
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Sell all your accounts from all institutions on one financial dashboard.
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Track both liquid assets and long-term investments.
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Monitor every aspect of your investment portfolio.
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See the real returns on your investments, including fees, expenses, cash flow and performance against benchmarks.
Quicken Premier allows you to enter data manually or have it automatically imported electronically. The service costs $7.99 per month, but is often discounted to $3.99 per month on the website.
Enable personal dashboard
Empower offers many of the same investment management and tracking tools as Quicken Premier, including the following:
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Investment tracking
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Cash flow analysis
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Investment returns
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Asset allocation views
Unlike many other portfolio management services, Empower’s tracking tools are free. However, Empower also offers an actual paid asset management and financial planning service, including property valuation, if desired.
Morningstar Investor
Morningstar Investor is a bit different from the other portfolio trackers on this list because it has more of an investment background. Morningstar Investor evolved from the company’s original Portfolio Manager product, which was famous for its ‘Morningstar X-Ray’.
This tool provides comprehensive investment information that goes deeper than many of its competitors and includes the company’s registered star rating system and analyst ratings. However, the service costs $249 per year.
Wedding full view
Fidelity Full View is a free service – at least for Fidelity customers – offered by one of the most respected financial services providers in the industry. Like other trackers, Fidelity Full View links your financial data so you can analyze your accounts with one “full view.”
To get started, simply enter your login information for each account you want to import the information from, including banks, credit cards, investment accounts, and even frequent flyer accounts if you wish. Once your accounts are linked, you can have Fidelity automatically update the information daily.
The bottom line
Portfolio management software and asset allocation tools can make planning your financial life easier. If you use all the tools from the best versions, you can actually become a better investor because you will see your asset allocation, risk profile, performance and tax situation much more clearly.
Frequently asked questions
Here you will find the answers to some of the most frequently asked questions about investing and portfolio management tools.
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How do I monitor my investment portfolio?
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What are the four types of portfolio management?
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The four types of portfolio management are active, passive, discretionary and non-discretionary. No matter what style of portfolio management you use, you can track all your portfolios through software.
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How do I track all my investments in one place?
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Portfolio management software programs are an excellent option for keeping all your financial information in one place. For example, if you have three different portfolios at three different companies, it can be difficult to get a real sense of where you stand in terms of your asset allocation and performance unless you combine them all with a good software program.
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The information is correct as of November 7, 2024.
Editor’s note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings, or recommendations expressed in this article are those of the author alone and have not been reviewed, approved, or otherwise endorsed by any entity mentioned in this article.
This article originally appeared on GOBankingRates.com: Best Portfolio Management Software for 2024
