Investing is a lot of numbers, letters, and jargon.
Taking that mess and giving it some order is a daunting, but important, project.
You should know your portfolio inside and out, and Personal Capital can help you do just that.
In this post, well show you how to use it to track and understand your investments.
Sure,set and forget investing is great.
But dont take it too literallyits still important to check in on your investments every now and then.
Its sort of like Mint, but instead of budgeting, its focused on investing.
Mint can check up on your investments, too.
But, compared to Personal Capital, their options are limited.
Personal Capital is meant to be an all-in-one budgeting and investment checkup tool.
But when it comes to tracking your spending, Mint does a better job.
I prefer to use bothMint for budgeting and Personal Capital for keeping track of my investments.
This might be Vanguard, Fidelity, your employers 401(k) managerwherever you have money invested.
Its still important to add your bank accounts and credit cards, though.
You want to get a complete idea of your net worth.
You canread more about their security policy here.
Once your accounts are added, you might see them all on the right sidebar of your dashboard.
They have a handy wizard that walks you through this process.
Youll get an overview of your net worth here, too.
All of your money is organized into those same five categories.
In addition to regular transactions, they also show your investment-related transactions.
So you’ve got the option to see the dividends and trades associated with your investments accounts.
But these transactions show up in Personal Capital, too.
In general, though, the Accounts and Banking tabs arent terribly useful features.
Really, they seem to be watered-down versions of Mint.
Here, your entire portfolio is broken down in a way that makes it easy to understand.
Plus, all of your accounts are in one place, which is important.
Here, youll see a list of the actual stuff youre invested in, represented by ticker symbol.
If youre into set and forget investing, youll mostly see a bunch of funds.
But maybe you have a 401(k) and a company builds your portfolio for you.
To see how these holdings have grown, theres a simple line graph in this section.
Read it the same way youd look at any investment graph.
Customize your date range and see how youve done over a period of time.
Previously mentioned Openfoliois another a decent tool for doing this.
Theyll look at your investments and tell you how youre performing, too, in comparison to the market.
Here, youll see how much your investment account balances have changed in 1-day and 30-days.
Youll see it as both a percentage and a dollar amount.
On an investment statement, theres usually a handful of jargon associated with your balances section.
On your statement, this may also be presented as a percentage.
Depending on your recent transactions and your return, your beginning and ending balances are usually different.
Your balances might also be presented as a chart, over time.
In that case, your beginning balance might coincide with the beginning date of that chart.
To read more about how your investments are taxed, check outour post on the matter.
Youll see return and balances in Personal Capital.
This is how its changing over time.
Ideally, it should be either mirroring or surpassing the market.
Many investment statements will tell you what your rate of return is.
Ageneral rule of thumbis that the stock market offers a 7% annual return, long-term.
it’s possible for you to find this information in Personal CapitalsPerformancetab.
Youll see how much your balances have grown, by amount and percentage.
Youll also see the income your account is earning in vs. the expenses associated with the account.
See How Youre Diversified
Its also important to know how youre diversified.
The answer will depend on a number of factors, but mostly your age and retirement goal.
This is why it helps to have all of your accounts in one place.
you might find this information in theAllocationtab.
And select those, and youll see exactly which of your investments make up that specific asset class.
Overall, the Portfolio view gives you a detailed, well-organized view of your account.
But, ideally, you want to see everything in one place.
Its just easier that way.
Really, all of this can be summed up into one common mistake: not being properly diversified.
Calculating your Asset Allocation
Your asset allocation will depend on many factors.
We told you how to set this upin our post on building a portfolio.
If youre more conservative, however, you may want to put 30% in bonds instead.
Its up to you, but this is a good starting point.
Then, as you grow older, you should adjust your asset allocation accordingly.
Bankratesasset allocation calculatordoes the job well.
It simply analyzes what youre already invested in and tells you what you could be doing better.
Bettermentis a great paid tool for calculating your allocation and keeping track of it, too.
But Personal Capital is probably the best free option.
When you sign up for an account, you answer a few questions about your savings goals.
Based on those questions, theyll take a look at your portfolio and give you a Target Allocation.
Your target allocation will fall somewhere on a scale from Most Conservative to Most Aggressive.
Stocks provide great growth potential but can be the most risky.
Bonds tend to be more stable than stocks, but are subject to price swings as interest rates change.
Cash is the most stable asset class but typically has low returns.
it’s possible for you to also browse different Target Allocations along their scale.
Not everyone would agree with what they call aggressive and conservative, though.
This is shown as a line graph, and compared to the historical performance of your Current Allocation.
This is pretty straightforward, and its represented by a simple bar chart.
This section is a measurement of where you are on the risk/return spectrum.
Are you taking too much risk?
Are you too conservative?
This X-Y axis graph will tell you.
Its based on a percentage.
Beyond that, it’s possible for you to also see how to rebalance the assets in your portfolio.
Their tool will tell you how muchdown to the dollaryou should increase and decrease of each asset class.
Openfolio is another solid free option for this.
They have asimilar tool called Tune Up.
Personal Capital is free, and they make money from clients who have assets greater than $100,000.
But theres no pressure to use this.
Keeping track of your investments can be time-consuming and stressful.
