Portfolio Trackers 101: What are they and Should You Use Them?

Portfolio trackers can help users navigate stock market volatility. It also provides them with exposure to different asset classes, making these trackers effective tools for investors and traders. Read this article to learn more.
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Investing is not easy as you need a certain amount of expertise to derive inflation-beating returns. However, there are several tools that can be leveraged to help users achieve their financial goals. One such tool is a portfolio tracker.

Portfolio trackers act as a digital ledger for all your investments – recording each transaction as well as displaying the net profit and loss incurred on the total portfolio. This breakthrough technology comes in handy when people maintain multiple trading accounts with different brokerages, allowing a consolidated overview of the net holdings and thereby, earnings.

Portfolio trackers also integrate the holding details of tax-advantaged accounts such as 401(k) and Individual Retirement Accounts (IRAs). With merely a single click, people can gaze into an overview of their holdings, total return on investments, as well as predict market trends (if you like to dabble in different investment tools).

While portfolio trackers are largely accredited with their ability to present a snapshot of a person’s holdings, institutional investors and analysts often use it to gauge the overall market trends. Depending upon the value and diversity of holdings, these trackers can help investors identify market trends since its emergence, thereby allowing them to capitalize on the changing investing patterns.

Why Use Portfolio Trackers?

It is no secret the stock markets have been attracting a larger volume of people since last year. According to Statista, the value of global equity trading reached a record of $32.47 trillion in the first quarter of 2020. CBOE Global Markets reported a 66% year-over-rise in the US equities average trading volume in May last year. The average value of trade on the London Stock Exchange surpassed £4.30 billion, over the past five days.

Image source: Statistica.
Image source: Statistica.

And these values represent the aftermath of a market crash. As we head into 2021, analysts expect a global market rally, as investor optimism regarding the vaccines has potential V-shaped recovery indicates the onset of a bull run.

Hence, 2021 is an ideal time to invest in equities and other market instruments. Whether you choose to invest in your government aided accounts or brokerage trading accounts, a portfolio tracker should facilitate the process through a unified platform, accessible through multiple devices.

Portfolio tracking software is designed to provide a comprehensive overview of the total investment across multiple asset classes, thereby reflecting the profits or losses garnered from each investment tool.

For example, during March last year, equity investments have delivered the worst performance, owing to the pandemic induced market crash. However, debt securities should have delivered positive returns, over this period, as their associated interest rates were higher than near-zero base rates of federal banks in developed economies.

As such, investors can gauge the magnitude of profits or losses from the respective tools, and rebalance their investments accordingly to maximize their overall returns.

A Glimpse into the Past

While portfolio trackers aren’t a relatively new concept, the software lost its luster a few years ago. Google Finance and Yahoo Finance were the leading free portfolio tracking platforms operating in the markets, offering core benefits to users. Google dominated this market for a long time and was often dubbed as the “gold” standard equivalent in the free portfolio trackers industry. Yahoo Finance came a close second, given its user-friendly interface and design.

However, Google remodeled its portfolio tracker in 2018, to limit the functions to basic information. This reduced the previously acclaimed platform’s popularity in the market, making users shift to alternative versatile yet free portfolio trackers in the market.

Conversely, Yahoo Finance took a different approach. The platform reduced the features on the basic no-cost platform to a minimum, while simultaneously launching a premium subscription-based version for all-round tracking. Moreover, the free version now comes with sponsored content and advertisements, reducing its efficacy and marketability.

Nevertheless, portfolio trackers have made a massive comeback from the reduced market enthusiasm a couple of years ago, owing to the rising number of retail traders actively investing in the markets. There are multiple free and paid portfolio trackers making waves among retail investors.

Features and Advantages of Portfolio Trackers

Many well-known platforms offer portfolio trackers for free. However, these come with limited functions, providing a snapshot of the holding investments and associated yields. Given the rising market demand for stock or equity investments, many platforms have rolled out extensive portfolio trackers on a subscription basis.

The best portfolio trackers generally provide a snapshot of individual holdings, including periodic returns, such as year-to-date earnings and monthly/ daily gains, dividend information, and stock splits. Many sites also provide notifications for important investor updates, such as quarterly earnings and shareholder meetings.

What to Look for While Choosing a Portfolio Tracker?

With a diverse variety of portfolio trackers available in the markets, choosing the correct platform can be a challenging task. Aside from the budget requirements, one of the foremost things to keep in mind is your investment patterns and trading strategy.

Multiple such trackers offer exposure to an assortment of asset classes apart from the standard investment tools, such as cryptocurrency and foreign exchange trading. Though offered at a higher price range, investors having a stake in such investments or wish to enter these markets should choose trackers that provide vigorous and up-to-date insights on these investment instruments.

Bottom Line

While portfolio trackers can be your one-stop solution to effectively manage all investments, make sure a comprehensive snapshot of your holdings doesn’t become overwhelming. Often, due to market volatility, an asset class (primarily equity investments) might fluctuate rapidly.

A comprehensive overview of the market upswings and/or downswings can lead people to alter their investment strategy, thereby rebalancing their portfolio with a focus on the most profitable investment tools.

However, many of these market oscillations are frequently short-lived, driven by unrelated macroeconomic or international events.  A snapshot of the effect of these underlying market developments might induce people to make the wrong strategy based on such short term developments, channelling into cumbersome losses.


Oliver Dale is Editor-in-Chief of MoneyCheck and founder of Kooc Media Ltd, A UK-Based Online Publishing company. A Technology Entrepreneur with over 15 years of professional experience in Investing and UK Business.His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More.He built Money Check to bring the highest level of education about personal finance to the general public with clear and unbiased

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