The 5 Easiest Ways to Manage Your Investments


Personal financial software can provide integrated management of your investing, portfolio, banking, bill paying and borrowing. The advantages of this type of software include a number of features that make it easier to manage your investments. You can use it to check on your current holdings, review your investment history and estimate the effects of changes to your portfolio. The graphic tools and built-in reports can save you time by providing information quickly.

Integrated Information

Jeff Morris, a certified public accountant and managing director of an accounting firm in Bethesda, Maryland, is an expert in personal financial software. He says, "In our experience with clients, the biggest obstacle to overcome in managing their personal finances is finding time to do it right. Quicken is designed to be easy to use and presents visually intuitive dashboards, tables and charts that help reduce the complexity in managing your own investments." Personal finance software can also keep you organized for tax time, eliminating the annual scramble to find the necessary paperwork.

One-Click Updating

Personal finance software can also be used for portfolio tracking, as well as connect to your various brokerage and mutual fund accounts to download all activity and balances. Once you set up these connections, you can update your portfolio with a single click. Morris says, "Quicken supports downloading quotes and investment information on individual securities, the creation of watch lists, and access to online research through the Quicken website. It is like having your own financial concierge to keep you on the path to financial health."

Comparison to Benchmarks

Managing your investments is more than just tracking the winners and losers. You need to know how your portfolio is performing against meaningful benchmarks. As Morris points out, "Quicken shows your investment returns and how it compares to market averages, keeping you focused on making the adjustments to your portfolio that will have the greatest positive effect on your long-term financial goals." One built-in report provides your investment internal rate of return for each security, so you can identify holdings that don't meet your minimum return requirements.

Asset Allocation

The way you allocate your money to different investment classes -- stocks, bonds, money markets, commodities -- has a major impact on your long-term returns, according to the U.S. Securities and Exchange Commission. Personal finance software provides pie charts that display your asset allocations at a glance. As the SEC explains, a properly diversified portfolio exposes you to a variety of investments and investment classes. Charts can help you determine whether it's time to reassess your portfolio to achieve your diversification goals. You can view how your asset allocation has changed over time, which might reveal an unwanted drift that requires adjustment.

Capital Gains Estimation

Quicken has a capital gains estimation tool to show you the effect that selling an investment would have on your tax liability. It estimates your total capital gains tax and indicate how to offset gains with losses. It also shows you any capital loss carryovers that can lower your tax bill. The program can help you find the cash to pay your capital gains tax by showing you how many shares you would have to sell to generate the cash you need. You can enter what-if scenarios to show the effect of selling different investments on your tax bill.