How to Start Tracking Your Investments With Personal Capital

Investing is a lot of numbers, letters and jargon. Taking this mess and putting things in order is a difficult but important project. You need to know your portfolio inside and out, and Personal Capital can help you with this. In this post, we’ll show you how to use it to track and analyze your investments.

Of course, set-and-forget investing is great . But don’t take it too literally – it’s still important to check your attachments from time to time. In addition, you must have an idea of ​​what makes up your investment portfolio, even if it does not require much maintenance. Personal Capital is a free web-based application that makes it easy to organize, track, and even analyze these investments . It’s kind of like a mint, but instead of budgeting, it’s focused on investing. We’ll show you how it works and how you can customize it to get a simple yet detailed overview of your portfolio.

Difference Between Mint and Personal Wealth

Personal Capital and Mint are similar in that they both do a great job of taking something complex and making it easier for users. Mint makes it easy to see where your money is going, and Personal Capital makes it easy to see how your net worth is changing .

Mint can check your attachments too. But, compared to Personal Capital, their options are limited. Mint will give you an overview of how your investments are doing, but it won’t give you a detailed understanding of their performance or the analysis of your assets.

Personal Capital is a versatile budgeting and investment verification tool. But when it comes to keeping track of your expenses, Mint does a better job. I prefer to use both Mint for budgeting and Personal Capital for tracking my investments.

How Personal Equity Tracks Your Accounts

After registering for a Personal Capital account, the first thing you need to do is add your financial accounts, and most importantly, your brokerage accounts. This could be Vanguard, Fidelity, your employer’s 401 (k) manager – wherever you invest. However, it is still important to add your bank accounts and credit cards. You want to get a complete picture of your net worth.

Like Mint, you add an online username and password for each account, and Personal Capital finds them, authenticates your information, and your accounts are added. If you are concerned about giving third parties access to your investment banks, be aware that Personal Capital uses a number of methods to keep your data safe. You can read more about their security policy here .

Once your accounts have been added, you can see them all in the right side toolbar. They have a handy wizard to guide you through the process.

Once you link everything up, you have a panel that shows:

  • Recent expenses
  • Change in net worth
  • Portfolio balances (value of your investment)
  • Portfolio distribution (what are you investing in)

Apart from the dashboard, the site is divided into three main tabs: ” Accounts” , ” Banking” and ” Investments” . On the Accounts and Banking tabs, you can check recent transactions, which are divided into five categories: cash transactions, investments, credit transactions, and any loans or mortgages. You will also get an overview of your net worth here. All your money is divided into the same five categories.

Apart from regular transactions, they also show your investment related transactions. This way you can see dividends and trades associated with your investment accounts. For example, if you log into Vanguard, you will see the same behind-the-scenes information regarding your index funds. But these transactions are reflected in personal capital as well.

Overall, however, the Accounts and Banking tabs are not very useful. In fact, they seem to be watered down versions of Mint. It would be great if they were a little more detailed and customizable, but for now, the Investing tab is what makes personal capital worthwhile.

Here, your entire portfolio is broken down in a way that is easy to understand. This is the same information that you can see in the investment declaration , but everything is a little more organized and intuitive. Plus, all of your accounts are in one place, which is important. It would be difficult to decipher your portfolio as a whole based on many different statements.

Check your investments with a portfolio overview

When you review your investment portfolio, there are a few things you should consider: what you invest in, how much you invest in different asset classes (such as stocks and bonds), and how your investment pays off over time.

Once you add your accounts to Personal Capital, you can find this information under Investing> Portfolio. It’s organized like this:

  • Holdings (what have you actually invested in)
  • Balances (how many are in your investment accounts)
  • Performance (how much you earned on each account)
  • Distribution (different types of assets you invest in, such as stocks, bonds or alternatives)

Know what you are investing in

Let’s start with holdings . Here you will see a list of actual attachments represented by the ticker. If you are a set-and-forget investing, you will basically see a ton of funds. With each of your packages, you can find out how many shares you have, how much each share is worth and how much the holding’s value has changed in one day.

If you’ve created your own portfolio, you probably already have an idea of ​​what these funds and holdings are. But perhaps you have a 401 (k) and the company builds your portfolio for you. In this case, it helps to see exactly what funds or shares make up your account, and you can do it here. Of course, you can also see this information in your 401 (k) report under Assets or Holdings.

To see how these assets have grown, there is a simple line graph in this section. Most account statements offer this, and Personal Capital has one representing all of your investment accounts – your entire portfolio.

Compare your portfolio to the market

Maybe you want to see how your portfolio grows versus the stock market. Some statements compare your rate of return – the percentage of growth in your portfolio – with indices such as the S&P, Dow, Foreign index, and US Bond Index. Personal Capital does this by referring to your portfolio as “Your Index” so you can see how you approach the market.

Read it like you would any investment chart. Adjust the date range and see how you felt over a specific period of time. Below, the blue line is the personal portfolio and the turquoise line is the S&P 500.

The previously mentioned Openfolio is another decent tool for this. They will look at your investment and tell you how you are performing versus the market.

Check your account balance

If you want to know exactly how much is in your account, take a look at the ” Balances ” tab.

Here you will see how the balances on your investment account have changed over 1 and 30 days. You will see this as both a percentage and a dollar amount.

An investment report usually has a few jargons associated with the balance sheet section. For instance:

  • Return : the amount of your investments has increased or decreased in value depending on their effectiveness. This may also be shown as a percentage on your statement.
  • Initial Balance : This is the balance you started with at the beginning of the billing cycle (possibly the first of the month). Depending on your recent transactions and your income, your starting and ending balances are usually different. Your balances can also be charted over time. In this case, your starting balance may coincide with the starting date of this chart.
  • Taxable or non-taxable income if your investments earn interest, it can be stated in your statement as taxable or non-taxable income, depending on the type of your account. To learn more about how your investments are taxed, check out our post on the subject .

You will see the profitability and balances in personal capital. It doesn’t explicitly tell you which income is taxable or non-taxable, but you can filter taxable and non-taxable accounts.

Find out how your investments are growing

More than your daily balance, you should be concerned about the performance of your portfolio. This is how it changes over time. Ideally, it should either reflect the market or surpass it. Many investment reports will tell you what your rate of return is. The general rule of thumb is that the stock market offers long-term returns of 7% per annum. The rules of thumb vary quite a bit and your rate of return will change with market fluctuations, but that at least gives you a rough idea.

You can find this information under the Personal Capital Performance tab. You will see how your balances have grown in terms of amount and percentage. They give you an overview of the “You Index” chart, but this tab breaks down the performance of each holding into more detailed information. You will also see the income your account is receiving versus the costs associated with that account.

See how diverse you are

It’s also important to know how diverse you are. What percentage have you invested in common asset classes – international stocks, US stocks, international bonds, US bonds, alternatives, and cash? The answer will depend on a number of factors, but mainly your age and retirement goal.

If you have a company-sponsored retirement plan, chances are your investments will be chosen for you, and those investments will be diversified depending on the target date that you selected from their menu of options. You may or may not be properly diversified, depending on your savings and retirement goals, as well as how much you have invested in other accounts.

This is why it helps to have all of your accounts in one place. This way, you will get a better idea of ​​what asset classes you have invested in, total and how much. You can find this information under the ” Distribution ” tab. It is broken down by asset class and you can click on any of these general classes to get a more detailed view: big cap, small cap, etc. And click on them and you can see exactly which of your investments make up that particular class. assets.

Overall, the Portfolio view gives you a detailed, well-organized view of your account. It contains all the important information – how much your investment brings, how much your value changes and what you invest in. You can see some of this information in separate reports, and there are several online tools that can help you analyze parts of your portfolio as well. But ideally, you want to see everything in one place. It’s just easier that way.

Find out how your portfolio can improve

When you see your portfolio in one place, it becomes a little easier for you to see where you can improve. We discussed a few common mistakes that investors make : investing too much in individual companies, holding too much money, and not investing in the broader market.

In fact, it all boils down to one common mistake: lack of diversification. You want to make sure that your asset allocation includes the mix of stocks and bonds that works best for your purposes.

Calculating your asset allocation

Your asset allocation will depend on many factors. We’ve shown you how to do this in our post on building a portfolio . But for an overview, here is a general rule of thumb for easy asset allocation:

110 – your age = the percentage of your portfolio that should consist of stocks

So, if you were 30, you would invest 80% of your portfolio in stocks (110-30 = 80), and the remaining 20% ​​in bonds with lower risk. However, if you are more conservative, you can invest 30% in bonds instead. It’s up to you, but it’s a good starting point.

Then, as you get older, you should adjust your asset allocation accordingly. So, if you follow the 110 rule above, you will want to buy more bonds when you turn 40 so that you have 20% bonds instead of 10 – the idea is that the closer you get to retirement, the less volatile your portfolio becomes.

If you would like to get a more detailed suggestion on your distribution, there are many tools to help you figure it out. The Bankrate Asset Allocation Calculator does its job well.

Personal Capital has its own tool for calculating your asset allocation, which is convenient because your investments are already linked to your account. It simply analyzes what you’ve already invested in and tells you what you could do better.

Betterment is a great paid tool for calculating your allocation and keeping track of it. But Personal Capital is probably the best free option.

When you sign up for an account, you are answering a few questions about your savings goals. Based on these questions, they will examine your portfolio and give you a Target Allocation. Your target distribution will be somewhere on a scale from Most Conservative to Most Aggressive.

Basically, your target allocation is how your portfolio should be invested – the percentage of stocks to bonds you should have, how much cash and alternatives you should have, etc. They explain the instrument in a little more detail:

  • It aims to maximize the expected return, balanced with your needs, willingness and risk-taking ability. Stocks have great upside potential, but can be the most risky. Bonds are generally more stable than stocks, but are subject to price fluctuations when interest rates change. Alternatives such as real estate, gold, and other commodities provide additional diversification and can act as a hedge against inflation. Cash is the most stable asset class but generally has a low yield.

You can also view the different target distributions by their scale. But since they use your own answers and goals, the distribution they choose should be best for you.

However, not everyone will agree with what they call aggressive and conservative. If you look at Personal Capital’s conservative distribution, you will see that this is the standard rule of thumb for investing in stocks versus bonds. Not everyone will find this conservative, so it is ultimately up to you how you want your distribution to look and adjust your risk level accordingly.

Compare your current distribution with your ideal distribution

In any case, the purpose of the target distribution is to compare it to your current distribution. You will see several different measurements:

  • Historical performance : How the value of your target placement has increased over the past twenty years or so. This is displayed as a line graph and compared to the historical performance of your Current Allocation.
  • Future Projections : How much overall you can expect to earn from your target distribution versus your current distribution at retirement, based on your current totals. It’s pretty straightforward and represented by a simple bar chart.
  • Risk and Return : Generally, bonds have low risk and low returns, while stocks have higher risk and higher returns. This section provides a measurement of where you are in the risk / reward spectrum. Are you taking too much risk? Are you too conservative? This XY axis plot will tell you.
  • Distribution Comparison : Here you will see a histogram comparing the assets in your portfolio with what should be in your target distribution. It is based on percentage. For example, if 5% of your portfolio is bonds, you will see this band compared to the target band in green, which means that you really should have 10% of bonds.

Apart from this, you can also see how to rebalance the assets in your portfolio. Their tool will tell you how much – to the nearest dollar – you should increase or decrease each asset class.

Openfolio is another solid free option for doing this. They have a similar tool called Customize . After you link your accounts to their web application, it will analyze your accounts and give you a score based on how well you avoid the aforementioned common investor mistakes. It is not as detailed as Personal Capital, but it will still give you some tips to improve your asset allocation.

Personal Capital is free and they make money from clients whose assets exceed $ 100,000. All of their tools are still free for these clients, but they have access to the services of Personal Capital consultants, and the site receives a fee to operate those services. But there is no pressure to use it.

Tracking your investments can be time consuming and stressful. With a versatile tool, it’s much easier to organize your portfolio and check it out from time to time.


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