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How to Get Started with Investment Portfolio Management

date September 17, 2021 time 5 min read 440 views

Investment portfolio management might sound like a scary technical term that only finance professionals can use, but it comes down to creating an investing strategy and tracking it over time. The best part is that modern solutions have made it possible for you to get involved, regardless of your background. If you’re curious to find out more, keep reading.

Investment portfolio management was once the preserve of wealth managers, professional traders, and other financial big hitters. You probably associate the term with high-end Manhattan business lunches rather than a viable option for your average Joe. But this is no longer the case.

Luckily for you and me, you don’t have to be a wolf of Wall Street to get involved in investment portfolio management.
Luckily for you and me, you don’t have to be a wolf of Wall Street to get involved in investment portfolio management. (Source: Pixabay)

The rise of online platforms has completely changed the game. All of us (yes, including you) now have access to investment portfolios covering the full range of asset types. If you’re wondering how investment portfolio management works, how to get involved, and maybe even how to find the best portfolio tracker app, you’re in the right place.

What is investment portfolio management?

In a nutshell, investment portfolio management is about (you guessed it) managing your portfolio. It involves selecting a range of investments and keeping track of how they perform, usually with a specific strategy in mind, such as reaching a financial target within a particular timeframe while taking on a certain amount of risk.

However, it may take a few different forms.

Active vs. passive portfolio management

If you’re somewhat familiar with how investment works already, you might be wondering which investment types meet the criteria above. That depends on whether you’re talking about active or passive management. 

Active portfolio management is the type that springs to mind for most people. This involves a portfolio manager who makes decisions on behalf of their client in exchange for a fee (usually a percentage of the total investment). They aim to use their expertise to outperform the market. Typically this has always been an expensive option, but recent innovations like robo-advisors have made the process more accessible. 

However, you can also opt for passive portfolio management, which is an even more affordable option. Instead of trying to beat the market, passive investors are happy to simply match it, which they do by tracking index funds or similar options. 

How portfolio management works

Strategy and investment goals are key to good portfolio management. Factors to consider include:

  • Risk tolerance (largely dependent on investing horizon).
  • Investing horizon (e.g., 5 or 10 years).
  • Investment goals (e.g., retirement, paying off a mortgage, saving for a wedding).

Of course, some people might be saving for a mixture of short-term and long-term goals, which requires a delicate allocation that can only be achieved through good portfolio management. 

It’s important to aim for a diversified portfolio, especially if the client is investing over a shorter time horizon. By spreading investments across different asset classes, there’s less reliance on one market, which could crash at any time. In effect, you would be leveraging one market with another, reducing the risk of negative returns.

One advantage of working with a manager is that they will periodically track a portfolio and rebalance it in some instances. This might be necessary when economic conditions (such as interest rates or significant political events) alter the riskiness and profitability of different investments. 

A final element of portfolio management is optimizing for taxes and the right account types (e.g., a 401k or Roth IRA). This makes portfolio management particularly worthwhile for those with the highest net worths, as they have the most potential to make greater savings in these areas. 

Be an active investor yourself 

Robo-advisors might make active portfolio management more accessible, but you can actually go one step further by becoming an active investor yourself. How? By following the advice above when you select your investments and finding a platform (such as peer-to-peer lending platforms) that enables your proactive approach.

The best portfolio tracker apps and management platforms

Now we’ve got the theory out the way, we can move on to a more practical question: what’s the best portfolio management or tracker app to use? These will be an essential tool to guide you through the journey of how your investments are performing and whether you’re on track to reach your goals.

Investment portfolio management is now something that just about anyone can do from their own living room.
Investment portfolio management is now something that just about anyone can do from their own living room. (Source: Pixabay)

We’ve compiled a selection below, but it’s by no means an exhaustive list, so do your own research too. 

Personal Capital

If you want to choose a well-known, trusted, tracker app, look no further than market leader Personal Capital. By connecting your accounts to the platform, you can work out whether you’re set to reach your investment objectives and how you can optimize your asset allocation by lowering fees or switching up your portfolio.

You can also use it for all kinds of aims and strategies, including net worth, retirement, and more general savings goals.

Money Minx

Although Personal Capital does a great job of tracking more general accounts and typical investment types (like stocks and brokerage platforms), it isn’t so hot on the vast range of alternative investments available these days. For instance, real estate crowdfunding and cryptocurrency lending are two investment types that won’t let you add.

Fortunately, Money Minx fills in the gaps by helping you track thousands of investments across all asset classes in one place—great for the adventurous among you.

MyConstant

If you’re interested in building your own DIY portfolio and want one platform to meet all your crypto needs, MyConstant might be right up your street.  

Our platform supports more than 70 different cryptocurrencies and gives you the option to earn from them in multiple ways with various levels of risk involved, so it’s a great place to build a diversified portfolio.

Although there are no tracking capabilities, it’s a good trick to have up your sleeve alongside the use of other solutions.

Google Sheets

Typical budget tracker apps like Money Minx and Personal Capital require you to link your accounts to their software, which not everyone is comfortable with. But you can go about things the (semi-)old-fashioned way and track your investments on a spreadsheet like Google Sheets.

GoogleSheets is a surprising contender for the title of best portfolio tracker app.
GoogleSheets is a surprising contender for the title of best portfolio tracker app. (Source: Google Sheets)

You don’t even need to create your own template from scratch. There’s a readymade Google Finance Investment Tracker available from Google’s template gallery, and you can find even more options if you give it a quick search.

Investing with MyConstant

See, investment portfolio management isn’t as scary as it sounds. If you do decide to open an account and try your hand at active investment, you’ll soon be wondering what took you so long. 

Whether you’re looking for a portfolio management app or just a place to let your money grow passively, MyConstant is a user-friendly and multi-faceted platform. We have both lower-risk options—such as depositing your USD to earn steady interest—and somewhat riskier investments, like lending your crypto to borrowers.  

Benefits of investing with us include:

  • 4% APY, compounded and paid every second
  • No fees
  • Anytime withdrawals
  • Minimum investment just $10
  • No maximum investment limit

Sound interesting? Sign up for a free account today and start investing.

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George Schooling

George Schooling

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