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  • 1. BetterInvesting Portfolio Manager Portfolio Asset Allocation Decisions Created by: QUANT IX SOFTWARE, Inc.Revised: November, 2005

2. BetterInvesting, Portfolio Manager and Asset Allocation

  • What is BetterInvesting?
    • BetterInvesting is a community of like-minded people committed to becoming better, more informed investors. For over 50 years, BetterInvestings community of individual investors has used the power of collaboration to take the mystery out of investing.
  • What is Portfolio Manager?
    • Portfolio Manager is BetterInvestings official software offering providing complete portfolio management and investment record keeping.
  • What are asset allocation and diversification?
    • Asset Allocation refers to the process of combining asset classes (i.e. stocks, bonds, and cash) in a portfolio in order to meet your investment objectives.
    • Diversification refers to the variety of investments within an asset class or portfolio.

3. Asset Allocation and Portfolio Diversification

  • Asset Allocation
    • Combining asset classes such as stocks, bonds, and cash in a portfolio in order to meet your goals
  • Diversification
    • Spreading portfolio assets over sufficient number of securities to avoid excessive risk from any one security
    • Common stocks should be diversified by industry sector and company size

4. Portfolio Manager and asset allocation

  • Asset allocation:
    • How to distribute investment funds among different broad asset classes i.e. cash, bonds, stocks and others.
    • Over time, the major source of investment risk and return is based on the asset allocation decision.
    • Determined by an investors objectives:
      • risk tolerance profile.
      • short-term and long-term needs.
      • goals and expectations

5. Portfolio Manager and diversification

  • Diversification
    • Spreading portfolio assets over a variety of securities to avoid excessive risk from any one security
    • Common stocks should be diversified by industry sector and company size
    • One of the BetterInvestings guidelines for successful long-term investing

6. Importing allocation and diversification data from BetterInvesting

  • Import BI S&P Stock Data Service
    • S&P Stock Data Service: online access to CompuStat financial data provided by S&P on over 7,000 publicly traded companies

7. Importing allocation and diversification data from BetterInvesting

  • Importing S&P Stock Data Service data allows examination of the characteristics of stocks held in portfolios
  • Additional common stock data used for fundamental analysis is also retrieved from BetterInvesting

8. Importing allocation and diversification data from BetterInvesting

  • Importing S&PMutual Fund Resource Center data allows examination of the true asset allocation and diversification characteristics of a portfolio
    • Provides detailed fund characteristics for asset class, industry sector and stock size

9. Importing allocation and diversification data from BetterInvesting

  • Importing S&P Stock Data Service and Mutual Fund Resource Center data allows examination of the true asset allocation and diversification characteristics of a portfolio
  • Mutual Fund Resource Center Provides Standard and Poor's mutual fund data and Standard and Poor's Mutual Fund Reports on over 17,000 mutual funds

10. Asset Allocation and Portfolio Diversification

  • Important point:When Portfolio Manager examines your portfolios asset allocation and diversification, the software will include the proportional impact of any mutual funds you may hold.
  • In other words,based on the dollars you have invested in each fund, Portfolio Manager will drill-down into the funds characteristics to allocate your mutual fund investments.
    • Provides true asset allocation and diversification analysis
    • Identifies rebalancing needs

11. First setup your portfolio allocation targets

  • Portfolio Manager allows you to set your portfolio target allocations ( File Menu | Portfolios | Portfolio Targets)
  • These targets are used to compare your objectives with the actual allocation

12. Selecting the reports

  • Select one of Portfolio Managers several useful reports to examine your actual portfolio allocations versus your target allocations

13. Compare your targets to actual asset allocation 14. Analyze your targets to sector diversification: 15. Compare targets to stock size diversification: 16.

  • Understand portfolio allocation & diversification
  • Maintain accurate, timely investment records
  • Review current holdings
  • Identify rebalancing needs
  • Implement changes to weed and feed portfolio to maintain proper diversification, meet new objectives or goals
  • Ongoing process for long term investing success!

17. BetterInvestings Portfolio Manager will lead you to better portfolio management decisions.Please visit these web sites to find out more aboutthe software, and to try a free demo version: www.betterinvesting.org www.quantixsoftware.com (developers site) Thank you for your interest in Portfolio Manager! Portfolio Manager for asset allocation decisions

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