Let The Web Mind Your Portfolio
Charles Lynch keeps track of his 15 or so mutual funds the old-fashioned way--on paper. "I'm pretty much a No.2 pencil pusher," says the 70-year-old retired graphic-arts sales executive from Sun City, Ariz. Problem is, the manual method is time-consuming. So lately Lynch has looked into computerizing his investment records. "It's definitely an expedient way to go," he says.
Yet if he leaps into cyberspace, Lynch will find a bewildering array of portfolio trackers. Beyond such packaged financial-planning software as Intuit's Quicken, a myriad of Internet sites now beckon with portfolio tools. While most offer basic service for free, it's not easy to pinpoint the sites that prove helpful when you want to figure out, say, how much you've got in large-cap stocks or even how much your investments gained this year. Alternatively, some sites that charge monthly fees, including Standard & Poor's Personal Wealth (like BUSINESS WEEK, a unit of The McGraw-Hill Cos.), offer no-frills free portfolio tools while saving their distinctive features for subscribers.
FREEBIES. To help you find the online portfolio tracker best suited to you, BUSINESS WEEK scrutinized dozens. In the end, we found five free standouts (table). Each boasts at least one differentiating feature, whether it's ease of use or exceptional analytic ability. Among the leaders, though, one is clearly superior in richness of detail and design: Microsoft Investor's Portfolio Manager.
The tools typically work by asking you to enter the ticker symbols of your stocks and mutual funds along with the number of shares you hold, your average cost, and, usually, any commission you paid. In return, the portfolio trackers use slightly delayed stock quotes to update the value of each holding and the overall portfolio, and to calculate gains and losses.
Microsoft Investor goes well beyond that widely available, stripped-down model. For example, it allows you to import records from many versions of the popular Quicken financial-planning software as well as from its own Microsoft Money. That's a huge time saving if you already have trading records entered in one of those programs. Overall, the site proved swift, easy to customize, and quite intelligent at aiding investors.
One prime example is how easily it allows you to track each stock or fund lot you buy or sell at different prices on different days--critical data to garner the best tax treatment for your investments. It's also a standout at monitoring employee stock options, even giving you the choice of tracking all your options or simply those that are vested. And it will automatically update your portfolio when your stocks or funds split, pay dividends, or distribute capital gains.
These seem like silly details until you have tried to keep track of a portfolio manually, entering fractional shares of reinvested stock dividends that stretch out four decimal places. Brokers do this on account statements, of course, but if you hold investments with more than one fiduciary, bringing all those data together to render a complete picture of your portfolio can be a nightmare. Microsoft Investor eases this process further by offering Internet links to discount brokers Charles Schwab and E*Trade, with more on the way. The feature is supposed to post your brokerage statement directly in your online portfolio. "Over time, this will be the way people do it, naturally," predicts Microsoft Investor's Product Manager Kirk Koenigsbauer.
We did find some nits to pick with Microsoft Investor. A list of insider trades and other research features you will find for free at, say, Yahoo! Finance, are available only to subscribers, who pay $9.95 monthly for a premium service. The portfolio tool works a bit better with Microsoft's browser, Internet Explorer, than with rival Netscape's Navigator. Macintosh users, meanwhile, only have access to a pale imitation of the full-featured tool. Also, if you use Quicken for Mac, you won't be able to import your data. Instead, you would have to enter them keystroke by tedious keystroke.
Curiously, that issue remains unresolved at Quicken's own site, which in some ways proved the most disappointing of the top five. Glaringly, Quicken's online portfolio keeper offers no way to move data to and from Quicken's desktop software. Product Manager Tapan Bhat says such problems are being corrected: "You can be sure that it will be much more seamless," he says. The tracker does, however, boast neat tools to analyze your portfolio's asset allocation, and offers some sound investment guidance.
Such features often come at the expense of speed. If time is of the essence, check out Yahoo! Finance, perhaps the swiftest of the leading sites and easily the most popular. It has little in the way of graphics, yet it offers many ways to customize what you see. It also has links to an impressive collection of free research data, such as details on trades made by company insiders. Yahoo! Finance creates none of its own editorial matter, aiming instead to "aggregate best-of-breed content," as site Producer Michael Riley puts it.
Morningstar, the Chicago-based investment research firm, takes a different approach. It hopes to entice investors to pay $9.95 a month, or $99 a year, for a premium service at Morningstar.Net with several proprietary features, including its "X-ray" functions. These work by drilling into the Morningstar database to learn, for instance, how much you're paying annually in fees, loads, and other expenses for your funds.
PERSONAL DATA. We put together a four-fund portfolio and checked Morningstar to see what it would cost to own. The X-ray told us our portfolio's overall expense ratio would be 0.25% of assets and then contrasted it to the average portfolio of comparable funds, whose expenses would run 1.17%. Another example: The site's X-ray can look at your individual stocks and stocks held by your funds to figure out how exposed you are in the aggregate to, say, Asia.
One potentially worrisome aspect of many sites, including Morningstar and Yahoo! Finance, is that you're forced to send off to their computers scads of personal financial information. Operators of these sites say the data are kept safely behind a password-protected firewall and, in any case, could not be used in a way you don't want.
If you remain dubious, however, you might want to try out CNNfn's Investment Tracker. It uses Marimba's Castanet software, which allows you to leave your personal financial data on your own computer. The CNNfn tracker then simply downloads prices and news each time you choose to update your records.
Intrigued, we tested it extensively. It took hours to get the CNNfn tracker to work right. Annoyingly, it kept automatically dialing up the Internet long after we had quit the program. Also, its functions are more limited than the other sites'. Beyond privacy, though, CNNfn offers one distinct advantage: The Castanet software allows you to launch the portfolio program offline--handy if you're working with a laptop on an airplane or are otherwise unable to get connected. Once you do get a connection, you can update the portfolio on prices or news.
The more trading history you can feed into a portfolio tracker--especially Microsoft's--the more powerful it becomes. Going online can give you a firmer grip on your investments. And it sure beats a No.2 pencil.
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