No matter what type of
investor you are, keeping an eye on your investments is always a priority.
Thankfully, websites devoted to this task are continually offering more
powerful portfolio management tools to help you do just that.
This Comparison article examines
the top online portfolio tracking websites for individual investors. The focus
here is on everyday investors and not on power traders or institutional
investors, so top sites in this category should have a good balance of power
and functionality, along with a reasonable price tag. In addition, expect these
websites to be user-friendly. The three sites designated as the best in this
year’s comparison are SmartMoney.com, Morningstar.com and Wikinvest.
Although online portfolio trackers are constantly adding new features and
functionality, they still pale in comparison to software-based portfolio
trackers. The majority of online portfolio trackers can only handle cash,
stocks, mutual funds and exchange-traded funds ETFs; they are limited in their
customization; and they offer fewer portfolio analysis features. Reports
offered are generally less robust than those found in software programs, as
well.
The main upside for
online portfolio trackers is that they are typically less expensive and, for
the most part, easier to learn and use. In addition, online services provide
the added convenience of being able to monitor your portfolio using smartphones
and tablets. There is no software package to install and update, and users do
not usually need to worry about platform compatibility.
With the majority of
individual investors using online brokerages, the merits of using a separate
site to track investments may seem redundant. Many online discount brokers
offer proprietary portfolio management capabilities that are very good.
However, most investors now have holdings in several accounts at different
financial institutions: For instance, you may have a 401(k) account in one
place, an IRA account in another and also an account at a discount broker. A
third-party online portfolio management service solves the problem of tracking
separate accounts by allowing users to combine and analyze all assets in one
location, making it easy to monitor all holdings as one complete portfolio.
Most of the top websites
that offer portfolio monitoring capabilities are part of larger comprehensive
investment websites. As such, the portfolio trackers often provide links to news
items and are able to provide emails that alert you to price, volume and news
triggers. Furthermore, if you are paying for a premium portfolio tracker, the
membership often comes with all the premium products offered at the website,
such as advanced screening tools and robust fundamental data.
When you are deciding on
a portfolio manager, there are certain crucial features to look for. The top
portfolio trackers here are all similar in functionality. When creating our top
list, the characteristics most heavily considered were:
·
Number
of portfolios that can be tracked,
·
Number
of securities that can be handled in each portfolio,
·
The
types of securities handled,
·
Frequency
of price updates,
·
Availability
of analysis tools,
·
Simplicity
of use,
·
Availability
of email alerts, and
·
Links
to additional news sources.
Although this list does
not represent everything individual investors look for in a portfolio tracker,
it covers the most important aspects to weigh when considering your options.
Number of Portfolios
The top websites each
offer a different number of portfolios that can be stored. For most investors,
the differences will not be an issue, since users can store 25 separate
portfolios at a minimum. If you have more than 25 separate portfolios, you may
want to consider consolidating.
Another area to take into
account is the maximum number of holdings each portfolio can track. Once again,
this should not be an issue for the most part. However, it is worth noting that
there is a definite possibility that users might reach the maximum allowed by
SmartMoney.com, which is 50 securities per portfolio. Investors run almost no
risk of reaching the maximum number of holdings per portfolio when using
Morningstar.com or Wikinvest.
Securities Handled
One of the key differences
between online portfolio trackers and the more robust software-based portfolio
programs is the types of securities handled. Online services mainly track cash,
stocks, mutual funds and exchange-traded funds. Data on these types of
investment holdings are readily available on most investment websites.
Morningstar.com allows you to manually enter bond holdings and
SmartMoney.com offers tracking of options. However, investors with significant
holdings in bonds, options, futures or real estate may need to look elsewhere.
If you are interested in more powerful, software-based portfolio managers, be
sure to see our comparison in the Fourth Quarter
2011 issue of Computerized Investing (available at
www.computerizedinvesting.com).
All of the top online
portfolio trackers can handle stocks, mutual funds and exchange-traded funds.
Frequency of Updates
Online portfolio trackers
originally required users to manually refresh the page to update pricing and
market values for holdings. This is not the case anymore, as the top online
portfolio managers reviewed here all update dynamic information, such as
pricing, automatically when new data is available. In addition, the pricing
data are all provided in or near real-time.
However, data updates are
not frequent enough for investors who are performing trading functions.
Additional Analysis Tools
The availability of
additional portfolio analysis tools is usually one of the top priorities of
investors looking for a portfolio manager. The ability to generate quick
breakdowns of your portfolio in terms of sectors, asset classes and industry is
crucial when attempting to maintain a diverse portfolio. Being able to compare
your portfolio’s asset class, sector and industry weightings against that of an
index is an added bonus.
In addition, each of the
three top online portfolio trackers offers company analysis and fundamental
data. Morningstar.com and SmartMoney.com were both highlighted in AAII’s
comparison of top comprehensive websites (August 2012 CI Online Exclusive;
available in the Comparison archives online), so both offer a bevy of other
features, such as stock and fund screening. Morningstar.com provides propriety
company analysis for premium members. SmartMoney.com offers a variety of
java-based tools. Wikinvest provides company pages that can be edited by
registered users and allows members to post articles on perceived investment
trends.
Simplicity of Use
Another key consideration
for investors is the relative ease-of-use of an online portfolio tracker. Users
with basic computer knowledge should have no problem using any of the three top
online portfolio trackers.
Wikinvest’s extra option of automatically “syncing” with your brokerage
accounts makes it the easiest to use, especially when initially setting up your
portfolio. Morningstar.com offers videos to help you get started, along with an
extensive frequently-asked-questions FAQs page.
Email Alerts and News
The beauty (and potential
annoyance) of living in the information age is that you can be constantly
connected to the Internet, which enables you to receive continual updates. Each
of the three top online portfolio managers offers email alerts that can be sent
based on a variety of triggers.
With so much news
available at your fingertips, news items have become a big driver of short-term
stock price movement. As two of the top comprehensive investment websites,
Morningstar.com and SmartMoney.com provide outstanding news from outside
sources. These news stories can be shown directly on the website portfolio
pages. In addition, they are prominently linked in company summaries.
This comparison focuses
on our top picks among the online portfolio management websites. This year, the
top online portfolio trackers remain the same as our last Comparison in
2010—Morningstar.com, SmartMoney.com and Wikinvest. Depending on your
investment websites of choice, the best portfolio tracker for you may simply be
the one on the website you already typically frequent.
As part of our due
diligence, I took a close look at the portfolio trackers at Google Finance and
MarketWatch.com. After familiarizing myself with the new features available at
each site, I decided not to add either to our top list. Google Finance offers
very limited additional analysis tools and does not provide the features that
we have come to expect from the best online portfolio trackers.
MarketWatch.com, on the other hand, does offer good analysis tools, but
creating portfolios on the site was not intuitive. In addition, MarketWatch.com
does not offer a comprehensive help section.
Source: http://www.aaii.com/
0 comments:
Post a Comment