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BetterInvesting Portfolio ManagerBetterInvesting Portfolio ManagerPortfolio Asset Allocation DecisionsPortfolio Asset Allocation Decisions
Created by: QUANT IX SOFTWARE, Inc.
Revised: November, 2005
2Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
BetterInvesting, Portfolio Manager and Asset AllocationBetterInvesting, Portfolio Manager and Asset Allocation
What is BetterInvesting?
BetterInvesting is a community of like-minded people committed to becoming better, more
informed investors. For over 50 years, BetterInvesting’s community of individual investors
has used the power of collaboration to take the mystery out of investing.
What is Portfolio Manager?
Portfolio Manager is BetterInvesting’s official software offering providing complete portfolio
management and investment record keeping.
What are asset allocation and diversification?
Asset Allocation refers to the process of combining asset classes (i.e. stocks, bonds, and
cash) in a portfolio in order to meet your investment objectives.
Diversification refers to the variety of investments within an asset class or portfolio.
3Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Asset Allocation and Portfolio DiversificationAsset Allocation and Portfolio Diversification
Asset Allocation
Combining asset classes such as stocks, bonds, and cash in a
portfolio in order to meet your goals
Diversification
Spreading portfolio assets over sufficient number of securities to
avoid excessive risk from any one security
Common stocks should be diversified by industry sector and
company size
4Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Portfolio Manager and asset allocationPortfolio Manager and asset allocation
Asset allocation:
How to distribute investment funds among
different broad asset classes – i.e. cash,
bonds, stocks and others.
Over time, the major source of investment
risk and return is based on the asset
allocation decision.
Determined by an investor’s objectives:
o risk tolerance profile.
o short-term and long-term needs.
o goals and expectations
5Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Portfolio Manager and diversificationPortfolio Manager and diversification
Diversification
Spreading portfolio assets over
a variety of securities to avoid
excessive risk from any one
security
Common stocks should be
diversified by industry sector
and company size
One of the BetterInvesting’s
guidelines for successful long-
term investing
6Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Importing allocation and diversification data Importing allocation and diversification data from BetterInvestingfrom BetterInvesting
Import BI S&P Stock
Data Service
S&P Stock Data
Service: online
access to
CompuStat
financial data
provided by S&P
on over 7,000
publicly traded
companies
7Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Importing allocation and diversification data Importing allocation and diversification data from BetterInvestingfrom BetterInvesting
Importing S&P Stock
Data Service data
allows examination
of the characteristics
of stocks held in
portfolios
Additional common
stock data used for
fundamental analysis
is also retrieved from
BetterInvesting
8Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Importing allocation and diversification data Importing allocation and diversification data from BetterInvestingfrom BetterInvesting
Importing S&P Mutual Fund
Resource Center data allows
examination of the true asset
allocation and diversification
characteristics of a portfolio
Provides detailed fund
characteristics for
asset class, industry
sector and stock size
9Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Importing allocation and diversification data Importing allocation and diversification data from BetterInvestingfrom BetterInvesting
Importing S&P Stock Data Service and Mutual Fund Resource Center data allows examination of the true asset allocation and diversification characteristics of a portfolio
Mutual Fund Resource Center Provides Standard and Poor's mutual fund data and Standard and Poor's Mutual Fund Reports on over 17,000 mutual funds
10Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Asset Allocation and Portfolio DiversificationAsset Allocation and Portfolio Diversification
Important point: When Portfolio Manager examines your portfolio’s asset allocation and
diversification, the software will include the proportional impact of any mutual funds you may
hold.
In other words, based on the dollars you have invested in each fund, Portfolio Manager will
drill-down into the funds characteristics to allocate your mutual fund investments.
Provides true asset allocation and diversification analysis
Identifies rebalancing needs
11Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
First setup your portfolio allocation targets …First setup your portfolio allocation targets …
Portfolio Manager allows you
to set your portfolio target
allocations ( File Menu |
Portfolios | Portfolio Targets)
These targets are used to
compare your objectives
with the actual allocation
12Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Selecting the reportsSelecting the reports
Select one of Portfolio
Manager’s several useful
reports to examine your
actual portfolio allocations
versus your target
allocations
13Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Compare your targets to actual asset allocationCompare your targets to actual asset allocation
14Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Analyze your targets to sector diversification:Analyze your targets to sector diversification:
15Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Compare targets to stock size diversification:Compare targets to stock size diversification:
16Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversification
Understand portfolio allocation &
diversification
Maintain accurate, timely investment records
Review current holdings
Identify rebalancing needs
Implement changes to weed and feed
portfolio to maintain proper diversification,
meet new objectives or goals
Ongoing process for long term investing
success!
17Portfolio Manager
BetterInvesting’s Portfolio Manager for asset allocation and diversificationPortfolio Manager for asset allocation decisions
BetterInvesting’s Portfolio Manager will lead you to better BetterInvesting’s Portfolio Manager will lead you to better portfolio management decisions. portfolio management decisions.
Please visit these web sites to find out more about the Please visit these web sites to find out more about the software, and to try a free demo version:software, and to try a free demo version:
www.betterinvesting.orgwww.betterinvesting.org
www.quantixsoftware.comwww.quantixsoftware.com (developer’s site)(developer’s site)
Thank you for your interest in Portfolio Manager!Thank you for your interest in Portfolio Manager!