The Best Tools to Manage Your Long-Term Investments
Investing money is one of the hardest things you can do with it. It’s much easier if you have tools that can show the correct perspective. Here are the best ways to manage your finances based on your needs.
Everyone has different goals with money. The tool that works best for you will depend on what you want to achieve. Some choose to actively monitor their investments, while others want hands-off. It will also depend on how you invest. If you’re just saving money at your company’s 401 (k), you will need different tools than if you are opting for your own stocks, mutual funds, or index funds. So, we’ll look at several options based on several different situations. You can also check out our introduction to the investing guide if you are looking for a basic stock market course and basic investing terminology.
Researching and managing your first investment: shareholder
If you’re just starting to invest for yourself, Sharebuilder (or “CapitalOne Investing,” as it is sometimes confused) is a great service that crosses the line between Baby’s First Investment site and a professional grade research tool. This is useful for people who want a high level of control over their investments, but if you are new to investing and just want to see how it works, you should check it out too.
How to use it
Sharebuilder allows you to deposit savings directly into your account while you wait to deposit them. This immediately makes it very useful for saving money without even thinking about it. You can set up automatic deposits to your Sharebuilder account just like any other account . Thus, your savings will not be available.
From there, you can use the research tab to find information on potential companies or funds that you might want to invest in. The research tab is divided into subsections for stocks, ETFs, mutual funds, and several other categories. You can create watchlists to keep track of a character over time before getting down to business.
Don’t be scared if you don’t know what everything in the exploration tab means. One of the great things about Sharebuilder is that you can save money without investing and do research without risk. If you are new to investing in general, start by creating a watch list and follow it for about six months. Until then, set up automatic withdrawal from your bank. As you learn how the site works, you will accumulate a decent amount of money that you can use to make a real investment when you’re ready. You can also start digging by investing quite a bit .
Long-term analysis and monitoring: personal capital
Once you have a solid investment portfolio, you will want to have an idea of how it is doing. Your first instinct may be to watch stock symbols every day. Heck, both Google and Apple have features for this built into their mobile operating systems. However, this can only give you a limited idea of how things are changing. If your investment falls for several days (or weeks!) In a row – which is bound to happen at some point – this can cause you to panic and sell your investment too early. Instead, you can use a service like Personal Capital to get the best long-term perspective on your finances.
How to use it
Much like the beloved Lifehacker Mint , Personal Capital lets you log into your various accounts to get an overview of everything. Unlike Mint, it has specialized tools to help you diversify your portfolio and compare your performance to the market as a whole. Both are important to ensure a stable return on your money.
One of the first tools to check out when creating an account is the Portfolio section (Invest> Portfolio on the top navigation bar). Here you can compare your portfolio performance against the S&P 500, DOW and other indices that measure the market as a whole. If they consistently lag behind the rest of the market, you might want to consider selling. On the other hand, if they are down, but your portfolio is still doing well than the market, hold on to them. Don’t sell in a few days (and of course, know your risk tolerance ), but it can help you get some perspective in the long run.
The Portfolio Allocation Tool in the dashboard is also useful for viewing the degree of diversification of your accounts. You can see how much of your money is invested in domestic or international stocks and bonds. You can also use the Investment Checkup tool to explore diversification across different industries. Ideally, you should spread your investments across several types of investments, as well as across different industries, so as not to risk losing everything to one ineffective performer.
You should also check out Personal Capital’s Pension Fee Analyzer . You can use this to see how much taxes and fees will affect your retirement accounts over time. It is also useful for estimating income over the life of your accounts.
Accidental Investment Monitoring: Mint
For some, this is too much to keep track of a ton of investments. Not everyone can be a financial expert, and that’s okay. However, it’s still worth knowing what’s going on with your accounts. If you’d rather just keep an eye on it without getting into the complexity, Mint is our favorite all-in-one financial tool.
How to use it
If you are already a Mint user, simply log into your investment accounts in Mint to keep track of them. As power users know, you can see a summary of all your accounts in the sidebar as soon as you log in. You can see the total value of your investment at a glance without much effort.
If you want to go a little deeper, Mint has a tool similar to Personal Capital in the Investments section. You can see how your portfolio is performing against the Dow Jones, S&P 500 and NASDAQ indices. You can’t get insight into things like industry diversification or commission analysis like with Personal Capital, but it’s helpful to see where you are without getting overwhelmed. If you are not using anything else to track your investments, this tool in Mint should be checked about once every few months.
Bogus investing for everyone: improvement
If everything in this article sounds like someone introduced Greek and Klingon via Google Translate, Betterment might be the best option for you. This site allows you to invest directly like Sharebuilder, but provides many tracking and analysis tools like Personal Capital. It is ideal for creating a lazy, low-risk investment strategy .
How to use it
You can set up automatic deposits to your Betterment account just like in Sharebuilder so you can save your savings effortlessly. Betterment then offers you simplified goals like building a safety net or planning for retirement. The service will invest and diversify for you. You can see which industries and assets your money will go to and whether you can achieve your goals or not.
The service is largely hands-off. Betterment will try to follow the market (or surpass it somewhat), but there is no promise of getting rich quick. This is a relatively low risk and actually a much smarter option if you don’t know what you are doing when it comes to investing.
Bonus option: check your investment account with the provider
Of course, chances are at least some of your investments will be made through a company not mentioned in this article. While you can use Personal Capital or Mint to monitor your accounts, the firm that made your investment for you may have some useful tools as well. We’ll take Voya Financial as an example.
Voya handles the retirement accounts of many employers. When you first log in, you will see a tool called myOrangeMoney . This tool allows you to see and regulate how much of your salary you are saving by 401 (k). You can also tweak your retirement age and estimated annual return to see how much you can hope to receive after retirement. This will help you determine how much you need to save.
Each provider will have different tools, so we won’t go into details specifically about Voya. But find out which company is handling your retirement account and find out what monitoring tools are available.