Investing is not an easy thing. it takes time, patience, and quite a bit of courage. while some people are lucky to be born with all the qualities needed for this task, others become great investors by learning from their past mistakes made in the fields of investments and finance. the result is a set of tools called financial tools for investment. they can help anyone to become a better investor and achieve more profits in future stock investments. Investing can be intimidating with all the terminology and various tools involved with the process. The most basic of financial tools is an investment plan. Your investment plan is a blueprint or map that you follow in order to achieve your overall financial goals. A written investment plan can help by clearly establishing goals, strategies and action steps to move you closer to financial independence so you can enjoy your life and not have to work so hard while feeling secure by saving more and increasing your income while reducing taxes.
Financial tools—also known as analytical tools—are a collection of techniques and models that help us analyze and assess stocks, sectors, industries, and markets across a range of factors. Financial tools help us make investment decisions. Depending on the situation, there are many different investment tools to use. These investment tools include interest rates, home equity rates, compound interest, bond ratings, and the rollover method among others. These products offer a flexible grab-and-go feature that is useful for anyone on the go.
MORNINGSTAR PORTFOLIO MANAGER
The Morningstar Portfolio Manager takes a different approach than Personal Capital’s financial dashboard. With Morningstar, you must manually enter each of your investments into its Portfolio Manager tool (although the company says it’s working on an automated solution). While it takes more work to enter your investment account data into Morningstar’s Portfolio Manager, the analysis provided by the tool is well worth the effort. The tool provides basic data about each of your investments, including its current price, daily changes in value, and its percentage weight in your overall portfolio.
Morningstar’s Portfolio Manager also provides robust data on overall portfolio performance. It shows you your portfolio’s total return by month and year and compares it to a benchmark of your choice. Where Morningstar really shines, however, is with its Instant X-Ray feature.
Instant X-Ray gives you detailed information about your portfolio’s asset allocation. It shows you the investment style box of your portfolio for both stocks and bonds. It breaks out your investments by sector, stock type, and even by region. And it shows you the weighted average mutual fund expense ratio of your portfolio.
Finally, Instant X-Ray shows you what percentage each individual investment in your portfolio represents in your portfolio as a whole. This can be particularly useful for those who invest in mutual funds. In my case, Apple represents just over 13% of my portfolio. That’s due in part to direct ownership of Apple stock, but also to the heavyweight given to large companies like Apple in index funds that are also part of my portfolio.
Morningstar offers both free and paid membership. You can use its Portfolio Monitor with either membership, although some tools require a paid membership.
ROBINHOOD
This is the go-to choice for buying equities (aka stocks). The main reason being is all the trades are free.
There is absolutely zero commission. The app is free to use too. Who doesn’t love free? That’s a rarity in the investing world. Most places at least charge $5 per trade. If you’ve only got $100 to invest this month and charged $5, you’re already down 5%. Robinhood means you can invest small amounts without eating into our returns. The research tools aren’t as robust as some other firms, but, most of those tools are for day traders anyways. You’re also not able to open up an IRA or Roth IRA with Robinhood…yet. They say it’s in the works.
PORTFOLIO ANALYSIS WITH QUICKEN PREMIER
Quicken Premier offers investment tools to track and analyze a portfolio. It’s well-suited for those who prefer software over an online app, and the Premiere version of Quicken allows you to connect your investment accounts to the software. Once an account is connected, Quicken tracks investment activity, including all transactions in the accounts. What’s particularly noteworthy is Quicken’s use of Morningstar data.
For example, Quicken will show you the Morningstar category of each investment, its rank in that category, the Morningstar rating and other Morningstar data. Quicken also gives you access to Morningstar’s Instant X-Ray tool described above. In this, you get access to the data offered by Morningstar without having to manually enter your portfolio.Quicken also enables you to set a target asset allocation and then compares it with your portfolio’s actual asset allocation. You can review the asset allocation at the portfolio level, the account level or by individual security. The one downside to Quicken is its user interface. The software looks like it hasn’t been updated in a long time. It’s functional, but not polished.
Personal Capital’s Free Financial Dashboard
Personal Capital offers a free financial dashboard that I’ve used for many years. In my opinion, Personal Capital is the best overall investment tracking solution available today.
Begin by opening a free account, and then link your various financial accounts to the Personal Capital platform. Once your accounts are linked, Personal Capital’s dashboard aggregates all of your financial data and provides a wealth of information and analysis. Focusing on its investment tools, Personal Capital provides the following high-level information:
- It classifies your investments between retirement and taxable accounts.
- It displays your investments by account or by individual holding.
- It tracks your investment performance over time, comparing your returns to several benchmarks.
Personal Capital also organizes your investments by asset class. It does so using the following investment categories:
- Cash
- International bonds
- US bonds
- International stocks
- US stocks
- Alternatives
In addition to aggregating and sorting your account and investment data, Personal Capital provides tools that provide insight into your retirement investments, the fees you’re paying, and an investment checkup that looks at your overall asset allocation.
CONCLUSION
You can earn a lot of money through investing if you have the right kind of financial tools. It is always better to try out various investments, instead of putting your money into one investment strategy only. The stock market is the heartbeat of capitalism, but for many people, it’s also an increasingly complicated topic. The tools that you need to succeed as an investor are not daunting or difficult to learn. They are also necessary to build wealth, reduce risk, and grow exponentially over time.