Today’s diversified portfolio looks quite different than one from past decades. As your net worth rises, you will likely own far more than just stocks and bonds. In addition, you may have a collection of other assets, including real estate, cryptocurrency, venture capital, private lending, and other more unique holdings.
Now, of course, a portfolio tracking spreadsheet or net worth tracker can help you figure out how much you own. That’s simple…collect updated information on values and subtract your liabilities. But is that enough?
You Need Insights…Not Just More Information
While a net worth tracker provides some information, it doesn’t do much for your decision-making. Same with account statements: there’s a lot of information there, but it doesn’t necessarily equate to actionable insights.
With these tools, you can’t necessarily tell where your risks or opportunities lie. You also can’t easily see if your portfolio is appropriately balanced or if some of your allocations are overweight compared to where they should be.
But those insights are needed to manage risk and take control of both wealth building and preservation. Without that, you may have blind spots which can compound and lead to future problems.
That’s why you need more than a simple net worth tracker. So it’s no surprise more investors are turning to an Investment Portfolio Tracker to help them monitor their holdings and make better decisions.
What’s the Purpose of an Investment Portfolio Tracker?
Let’s look at a hypothetical example to show how an Investment Portfolio Tracker can help you.
Paul is a successful surgeon. Over time, he’s diversified his investments far past stocks and bonds. Today Paul has three rental properties –two in Colorado, one in Hawaii, a growing investment in a few cryptocurrencies, interests in a few medical startups, private equity holdings, and a hedge fund position. In addition, Paul has an equity interest in a surgery center that his practice uses.
Paul works with two different financial advisors to help him with his stocks and some of these other assets.
Now, these advisors do help keep Paul updated. He also gets regular updates from the hedge fund manager and the managers of his more specialized holdings. And, of course, he gets monthly or quarterly statements from most of these companies.
But that is not enough. Not only does Paul not have the time to read page after page, he still doesn’t have a clear overall view of his diverse holdings and where each is headed.
Technology to the Rescue
As your wealth grows, this type of diversification is usually needed to help protect your wealth. But how do you manage this complex maze of assets?
Fortunately, technology has enabled the creation of purpose-built platforms to make the management of all this information far easier and faster.
How to See the Big Picture
As you can probably see, you need insights far beyond what an asset is worth today to make good decisions. Instead, you need a big picture view to evaluate your overall situation and see possibilities and problems. More specifically, here’s what most investors can benefit from:
- A comprehensive view that includes all of your assets, not just stocks, bonds, and bank accounts.
- A complete history of each investment, so you can observe trends, seasonality, and other factors over both short and long-term time frames.
- Automatic updates to save you time.
- Comparisons to benchmarks, so you can see how your investments, individually and overall, are doing compared to the industry averages.
- Comparisons to other assets, so you can make informed decisions on where to allocate more or less of your capital in the future.
What Can the Big Picture View Help You Achieve?
Having the facts in front of you can keep you focused on the cold, hard facts instead of any emotions you may naturally associate with any one investment. It can also allow you to observe your portfolio from different angles.
For example, you can compare your financial advisor’s performance against the appropriate benchmark index, so you can see if they are doing a good job for you.
How Claritus Advanced Analytics Help You Invest Better
Let’s go back to our hypothetical friend Paul. With the Claritus investment tracking platform, Paul can now get a clear big picture view of his investments. But that’s not all it gets him:
- Paul can set up custom tags and create groups to compare the performance of his two financial advisors, both against market benchmarks and each other. This can help him decide which advisor to shift more assets to down the road.
- Because Claritus allows Paul to monitor all his assets, not just traditional accounts, he gets an accurate picture of his entire portfolio.
- With this big picture view, Paul can rebalance his holdings across all assets. This way, he can keep more control of his overall risk.
Better Decisions Can Yield Many Benefits
Like most high income and high net worth investors, Paul is very interested in minimizing his tax burden. Next time he meets with his tax professional, he can share his Claritus screen with his CPA to look for tax savings opportunities much more easily.
Staying organized and in control is a challenge for most everyone in today’s complex world. But as your wealth grows, you can’t afford to let things drift. That’s where portfolio tracking software can help you regain control and make better decisions about current and future investments.
Ready to get your investments organized and under control?
Claritus is an innovative portfolio tracking platform that can help you make better decisions and feel more confident about your money.
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