When I started investing – literally decades ago! – the world seemed like a much simpler place. Everyone was far more sure of their beliefs and identities. We were certain we knew who our enemies were. We had an abundance of faith in the financial system. Regarding investments, there were far fewer options, although they tended to be more predictable.
Since then, the world has come a long way, and mostly for the better. We’re no longer so quick to judge others and are open to questioning even our most deeply held beliefs. The financial system no longer looks like an imperturbable monolith. There are far more investment opportunities around the United States and the world. Yes, things are more complicated, but that’s because we’re working with a much larger information base, and hundreds of millions more people who now have access to have the opportunities that were once reserved for the privileged.
That said, technology has offset the complications with tools that help us make choices and keep track of our investments. Apps that provide an investment dashboard can save you a lot of time and money, by making sure you never lose track of your wealth.
If you’re not automatically tracking your investments online with one of these tools, it’s time to change that. You don’t know what you’re missing out on. Also, it’s free, so you don’t have to worry about financial commitment to yet another investment tool.
Eliminate Human Error
Investment tracking is not all that new. Websites like Mint and Power Wallet provide some of the tools you need, and they’re also free. They allow you to link to your investment accounts and can therefore automatically update your dashboard. However, they’re lacking in a very particular way.
Put simply, they do little to help you understand your asset allocation or investing expenses in any meaningful way. They do the job of a very capable Excel Spreadsheet, which is itself very useful, but leaves ample opportunities for human error.
I’ve been looking for tools that go further, and recently came across Personal Capital. In my opinion, Personal Capital is the best free app available, but as long as it provides certain functionalities, any equivalent app will do.
This is what you need a good investment tracking app to do.
The following are some of the most important features any one of these apps should have:
- Automatic linking to investment accounts: it should update your holdings throughout the trading day
- Track the fees for mutual funds and ETFs
- Details asset allocation data for your investments
- Notifications when asset allocation is over- or under-weighted as compared to a target asset allocation model, determined according to factors such as age and risk aversion
- Retirement income calculations, projections based on your investments, projected social security, pensions, annuities, and other retirement income sources.
As you can see, these features go far further than the basic tracking capabilities. They use finance algorithms in a way that few personal apps would dream of. While your insurance company knows exactly what you should or shouldn’t be doing with your money or assets or health according to your age and profile, it’s tough to get that information for yourself without hiring an actuary.
The Future is an Algorithm
When we think about artificial intelligence (AI), our minds tend to bring up images from sci-fi movies. Robots who gain consciousness and rebel or simply try to fit into human society. The reality is that AI is more accurately viewed as a matter of algorithms.
Essentially, all logic works according to algorithms. We’ve learned certain formulae to help us navigate life, and often all we need to make decisions is more data. Occasionally, we’ll add some formulae to our knowledge base.
AI trumps anything humans can achieve simply because it is far easier to input new data and algorithms. This is more or less true even in regards to human interactions, but some say financial markets can be far more predictable.
The markets are predictable and therefore ripe for analysis by investment tracking apps. Yes, there are random factors that always throw a spanner or two into the works, but we’re not giving up our control to the software. We’re just allowing it to do much of the work for us!
Now that I’ve been using good investment tracking software for a while, it’s hard for me to picture what life would be like without it. My mind can’t hold the amount of information it once did. I often find myself walking into rooms and immediately forgetting what I came for.
There is also just so much more data to take into consideration in today’s world. We live in the information age which is made easier with tools like Personal Capital that are well-equipped to make the most of that over-abundance of information.
If you’re stubbornly holding onto the old ways, I totally get it, but you are missing out! Take advantage of the assistance of an investment dashboard and you could be making a lot more money.