Portfolio Tracking Methods

Question: How can I accomplish portfolio tracking?  How can I view my transaction history in terms of precise dates, units, unit values and amounts so I can see at what prices I bought the investments and what has happened to the prices (unit values) since my purchases?

Answer: Be sure you take a long-term view of the stock market.   Doing daily portfolio tracking leads to the temptation to make frequent changes in your allocations and this can lead to chasing prior hot performers or emotionally over-reacting to short term market decreases of some of your holdings.   Studies have shown that the hottest performers for one period will likely not be the best investment approach for the next period.  So tracking your portfolio closely is fine, but be careful about jumping around too much.  It is a proven fact that following your short term emotions and making frequent switches in your holdings leads to worse performance than having a allocation strategy and sticking with it even when it does not seem to be working.

On the other hand, we all have an active interest in just how well we are doing with our investments and so we want lots of on-going information about our portfolio.  You have numerous options available to you.

1.  You can get a very simplified overview of the transactions in your account in terms of the type of transaction (buy or sell), the date and the amount involved.  Simply sign onto your account on the www.bestofamerica.com site and then select "Trans History" under the View menu.  You will be presented with the transactions for the last 30 days.  To see more, complete the beginning and ending date ranges at the bottom of the screen.  This will not show any units or unit prices or equivalent shares for the underlying investment option.   You can easily get information on the Internet about how the investment options you are using have been performing in general.  This is sufficient information for most people, but this is not what we would call "portfolio tracking". 

2.  You can maintain a simple portfolio on numerous places on the Internet by using "equivalent shares".  This easy process allows you to have your portfolio re-priced each day based on what goes on in the market.  See the discussion below.

3.  You can view your transaction history in much more detail including date, type of transaction, dollar amount, units involved and unit prices for the specific transaction.  See our discussion below regarding opening up a file (using Excel) that can be downloaded from your account at the www.bestofamerica.com Web site. 

4.  You can even download your transactions into a file that can then be imported into Quicken or Microsoft Money and use their extensive portfolio tracking software to monitor your accounts in great detail, including combining investment outside of your 401(k) in the picture (IRA's, personal investments, etc.).  See the discussion below.

What we cannot do is tell you how to easily get a printout of historical transaction data in terms of the mutual fund shares and share prices for The BEST of AMERICA Group Pension Series program for purposes of portfolio tracking software.  For a thorough discussion of why this is the case see our Frequently Asked Question on that topic by clicking here: Transaction History Discussion.  

Simple Portfolio Tracking On the Internet

Assuming you do not want to go to the effort to use Quicken or Microsoft Money, there is still a very simple way to accomplish the most important aspects of portfolio tracking by using Internet sites and a concept of "equivalent shares".  Just about any of the major financial Web sites on the Internet (Morningstar.com; Netscape.com, Quicken.com; Smartmoney.com; etc.)  have a feature you can use to track a portfolio.  Note:  In using these sites, you cannot use Units and Unit Values of your actual transactions - you must use the "equivalent shares" concept.  

If you are interested in portfolio tracking and not already doing it somewhere else, our favorite portfolio tracking facility is on Morningstar.com.   We will use the facility on Morningstar.com as an example of what can be done, but the process described below should work for whatever portfolio tracking facility or software you are using.   The Morningstar web page publishes great articles about investing everyday.   You might want to check this site very frequently just for these articles, even if you decide not to do portfolio tracking.  The advantages of using some sort of portfolio tracking facility are:

1.  You can quickly see how the latest market gyrations affected your account balances because your portfolio can be re-priced at any time.

2.  You can click on any of your underlying funds Ticker symbols to immediately go to detail information about that particular  investment option.

3.  You can get overall statistics about your aggregate portfolio.  For example, you can find out what percent is allocated to a particular investment category such as Large Growth or you can get an analysis of your diversification within various sectors of the economy and comparisons to various benchmarks.  If you are not familiar with investment categories, go here:  Investment Categories. 

4.  If you signed-up for Morningstar.com's premium service (about $10 a month), you would get access to additional information about funds you are interested in and you can get emails giving you an overview of how your portfolio performed each day including any alerts or news articles about your portfolio.  You would also be able to use Morningstar's extensive online screening tool for selecting funds.  In addition, their "portfolio x-ray" facility would provide additional information about your overall holdings.

How to Create and Maintain a Portfolio Using Morningstar.Com

Hint:  You may want to print this page so that you can refer to it while going through the process.  All portfolio tracking facilities would be similar to this.

Step #1:  Access your account on the Internet by going to http://www.bestofamerica.com.  Log into your account in the normal way.  If you have not established access to your The BEST of AMERICA Group Pension Series account on the Internet yet, see our instructions on how to do so: How to Establish Access.   When your current account is displayed, make a note of the amount you have in each of the underlying investment options or send the information to your printer.

Step #2:  Go to Morningstar.com and if you have never done so, click on the box in the top left hand corner called "Free Member" underneath the heading of "Become A Member".   Follow their process to get registered with a username and password.  You should just use the free membership status at first.  You can get always upgrade to the premium membership if this stuff becomes your passion, but that premium membership would cost you approximately $10 a month.

Step #3:  Having completed your registration, click on the option "Create A New Portfolio."  Follow the instruction to create a portfolio.  The first screen will ask you to pick a portfolio name.  You could use something like: "My 401(k) Investments."  Then click on "Next."   On each line, enter any arbitrary date.  It might make the most sense to use the date when you are doing this.  When they are asking you to enter Ticker Symbols, etc.,  just enter the Ticker Symbol and enter 10 (an arbitrary amount) for the number of shares and then enter $10 (an arbitrary amount) for the share price and $0 for the commission paid.  If you do not know the Ticker Symbol, they have a great utility right on the page to let you look it up.  If you have any doubts about the Ticker symbol that relates to the underlying investment options available in your plan, please call our office for clarification (650) 341-3322.  After having entered the Ticker symbol and the phony initial data for each of your holdings, click on the Submit button at the bottom of the screen. 

Step #4:  Morningstar will now go out and find the Share Prices (NAV's) for each of your holdings based on the Ticker symbol.  To see this information make sure you click on the "Snapshot" tab at the top.   Make a note of those share prices.   Now for each of your holdings, divide your account balance for a fund on your Best of America report by the share price for that fund, and make a note of the equivalent number of shares that you just calculated.  Ignore the Units and Unit Value information.

Step #5:  Click on the button "Edit" tab at the top of the screen. You will see all of the holdings you entered.  Now click in the "Edit Transaction History" column beside one of your holdings.  Then click on the "Edit" button.  This time put in the actual equivalent number of shares you calculated in a prior step (replace where you inserted 10 shares earlier) and put in today's share price and leave the commission paid at $0.  When done with this for each of your holdings, hit the "Submit" button at the bottom and then the "Return" button.  Follow this process for each of the funds - editing your number of shares and the price.

Now we would recommend you pick "Custom" in the pulldown box called "Select a View".  Then select "Edit Custom" and put a dot beside the items: Show Holdings Full Name; Price; Shares; Price Change %; Market Value $; Day Change $; and Total Return YTD.  Now select the button at the bottom of "Save Changes". You can then even select to order of the columns in your Custom report by clicking on "Column Order".  Make once last check to see if the Morningstar portfolio is showing the same total value of each fund as the Best of America printout.

Whenever you go to Morningstar.com and you go to your portfolio, it will update the share prices and tell you how much money you made or lost during the latest trading day (if you wait a few hours after the market has closed) and it will show you the approximate value of your account.  Lots of other information is available as well, but we will let you discover that on your own.

Step #6:  Maintaining your information:  You must repeat the simple process described below once or twice a month to update your portfolio for deposits made to your account.  Here is how you do it.  First, go to your account balance on the Best of America web page (http://www.bestofamerica.com).  Print out your holdings or write them down.  Now go to Morningstar.com and click on the "Portfolio" tab and then select your portfolio in the pulldown menu.   It will look up the latest share price.  On your Best of America printout, divide the dollar amount of each of your holdings by the share price to get the equivalent number of shares you have at that time.  Now simply indicate you want to "Edit"  Beside each fund click on "Edit" and then "Edit Transaction History".  Simply update only the number of shares for each holding and save the changes by clicking on the "Submit" and "Return" at the bottom of the screen.

You are now ready to simply view your portfolio for the next couple of weeks.  Depending on how up-to-date you want the data to be, update your equivalent number of shares 10 or so days after each pay period or perhaps once a month.   If you go too long without updating your equivalent number of shares, you will be understating your account balance because you will not be adjusting the number of equivalent shares to reflect on-going contributions you are making.  The update process takes between 10 and 15 minutes, depending upon the speed of your Internet access.

By the way, you can enter other personal stock holdings into the same portfolio so you can see all of your holdings in one place.  Also note, because you are not entering shares purchased in detail each time, you should ignore any columns that are indicating specific rates of return or gains or losses as compared to purchase history.  But you can calculate your overall portfolio rate of return in another simple way see our Frequently Asked Question: How Can I Calculate My Rate of Return?

All of this sounds more complicated than it really is.   After a couple of cycles of updating your equivalent number of shares, you will find the process to be quick and easy.  

If fact this process is much quicker and much easier than actually putting in very specific data as to transactions asked for by most portfolio systems.  Let's suppose you have decided you want to utilize the full value of the portfolio tracking facility you have chosen.  You will need to input precise information for each transaction in your transaction history.  How would you get the data?  

Your transaction history printout from the www.bestofamerica.com web site would give you the date and amount of each transaction for each investment option you are using.  Now you need to retrieve the Share Value (NAV) on that date for each investment.  Go to www.bigcharts.com and select "Historical Quotes" from the menu tab.  Now enter the Ticker symbol and the date of the transaction.  BigCharts will give you the closing NAV on that day.  The dollar amount of your transaction divided by the NAV would be the equivalent number of shares bought or sold.  This would be a lot of work, but if you do not have too many investment options you are using and if you do not do a lot of trading between options, this can certainly be done.  However, we would recommend using Quicken or Microsoft Money and the automated exporting and importing of the transaction data as described below.  We are referring to the software version of Quicken and not the Quicken.com Web site.

Using An Available Download File Process to See Detailed Transactions

Lets suppose you just want to see your detailed transactions with more data than is provided by the Best of America web site.  You are curious about what the unit values were when you bought investments and how they have changed over time.  You can view a detailed history of dates, unit values, units, amount, etc. by following the process described below.

After signing onto your The BEST of AMERICA account at www.bestofamerica.com,  click on View / Trans History.  You will see transactions for the last 30 days.  At the bottom of the screen pick the dates of the transactions you want.  What you might do is try some very early date to get as much history as you can.  The note at the bottom of the site says that data is only available for seven months but we find more than that is actually available.

The most meaningful download might be one that goes back to the beginning of a Calendar Year.  After you decide on the dates you want, select the Quicken or the Microsoft Money download.  We will only describe the Quicken process, but the Microsoft Money process is probably very similar.  Save the downloaded file on your hard disk and make a note of the file name and location where you saved it.

Now boot up Microsoft Excel and indicate you want to open an existing file.  Change your "Files of Type" setting to indicate you want to see a listing of "all files" not just Excel files.  Select the downloaded file to open.  If your Excel is the same as the one we used, a Text Import Wizard should pop-up.  Choose the "Delimited" file type and hit the Next button. Deselect "Tab" and select "Other" under the delimiters area and then enter the "<" symbol in the box beside Other and then hit the "Finish" button.

Now increase the size of the columns (drag the column heading to be wider) so that you can see the data in each column.  The actual transaction data starts at approximately row 48 in reverse chronological order.  Everything you want to know about detailed transactions if included in this file.  When I look at this file, I personally like to clean it up a bit by leaving the important columns and deleting many others.  I also sort the file by Investment and then in normal date order.  Of course I save the file under a new name before I start manipulating it so that I can always start over if I have to.

If you find the file far to confusing to look at we can clean it up for you visually.  Simply email the downloaded file to paul.carlsonplandesign.com with a note saying you would like it organized and returned and we would be happy to do that for you.  

Once again, we would like to warn you not to simply try to put these transactions into a Internet oriented portfolio tracking system because these systems cannot generally handle transaction histories in terms of units and unit values because they have no way of looking up the current unit values or of letting you input the current unit values.  

Precise Portfolio Analysis Using Quicken or Microsoft Money 

What can you do if you want to do really precise portfolio tracking in a manner that allows you to get graphs, charts, return on investment calculations, portfolio analysis, etc. of your investments including your The BEST of AMERICA 401(k) investments?  Answer, you can use one of the very complete desktop software packages:  Quicken or Microsoft Money.  

The great thing about using Quicken or Microsoft Money is that The BEST of AMERICA program has a facility built into it that allows you export your  your transactions history from The BEST of AMERICA site and then import that data file into Quicken or Microsoft Money.  This saves you the effort of having to input the transactions by hand. 

After signing onto your The BEST of AMERICA account, click on View / Trans History.  You will see transactions for the last 30 days.  At the bottom of the screen pick the dates of the transactions you want.  To know what dates you want to ask for you will need to decide what is going to be your starting point for the tracking.  What you might do is try some very early dates and see how much history is available to you via The BEST of AMERICA facility.  In other words, if you have been in the 401(k) plan for several years pick a beginning date that goes back more that quite a ways and then inspect the transaction history presented on your screen to see how far back the system was able to go in retrieving transactions.  The note at the bottom of the site says that data is only available for seven months but we find more than that is actually available.

The most meaningful download might be one that goes back to the beginning of a Calendar Year.  After you decide on the dates you want, select the Quicken or the Microsoft Money download.  

When you are in Quicken and you want to import the transactions by using File / Import / Web Connect File.  We will not attempt to describe the Quicken or Microsoft Money procedures here because those are well documented within those software packages.

For a related discussion about how Nationwide handles investments in The BEST of AMERICA Group Pension Series, see another of our Frequently Asked Question: How Investments Are Handled?

Good luck with your investing!  We hope you have found this information to be very helpful.

If you have questions about the above, please call Paul Carlson of Plan Design Consultants, Inc. at (650) 341-3322.