Monitoring Investments

If you have more than one investment, you likely want to monitor and compare their performances to the market and to similar investments. Here are a few examples of the information and the software you need to accomplish this objective:

  • Market-monitoring tools send alerts that you determine. For example, if your stock increases by 25 percent, you may want to consider selling it. You can set up an alert that sends you an e-mail message notifying you that your stock has reached this target.
  • The Internet provides many portfolio management programs that let you know when your investments are in the news.
  • Online portfolio management tools can automatically send you an e-mail message at the end of the day to let you know whether your investments gained or lost value.
  • PC-based portfolio management tools are downloadable software programs that assist you in tracking your investments and record keeping.
  • Your online broker may track your portfolio for you and keep records of your profits and losses.

An effective investment monitoring program should provide the fiduciary with sufficient information to evaluate the investment program’s strengths and weaknesses, and appropriate benchmarks to help determine whether your goals are likely to be achieved.

Monitoring includes an analysis of not only what happened but also why. The analysis combines the elements of performance measurement – the “science” – with performance evaluation – the “art.” Performance measurement primarily is a technical accounting function that computes the return of the portfolio and component parts. Performance evaluation uses the information generated by performance measurement to determine what contributed to, or detracted from, the portfolio’s return.

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