Investment Record Keeping and Educational Tools

Shoe boxes in your closet, messy file folders on your desk, unopened envelopes in your kitchen junk drawer. Sound familiar? Unfortunately, for some investors this equates to "detailed" investment record keeping. This lack of organization leads to less informed decisions regarding your personal investments, not to mention more headaches - and expense - when preparing your year-end taxes. On the other hand, investors that do adopt an organized record keeping and portfolio management system have the educational tools that lead to better investment decisions.  These tools are ideal for reinforcing the following proven investment methods:

• Invest regularly, regardless of the short-term market outlook.
• Reinvest all earnings to take advantage of the magic of compounding.
• Invest in growth companies.
• Diversify to reduce risk.

Without some fashion of organization, tracking additional shares acquired through regular investing and reinvesting will become an accounting nightmare. A good record-keeping system organizes this activity, enabling the investor to see the merits of investing regularly, a proven investment style that has helped many individuals achieve long-term investment success.  For those investors not tracking in detail the purchases, income received, reinvestments, sales, expenses and other transactions that affect performance, the "early warning signs" of an under performing issue will be less obvious.

Investors who maintain detailed records can quickly identify the true performance of their holdings, easily identifying performance shortfalls. Well-organized investors can then rebalance holdings, weeding out laggards, while feeding their remaining investments and analyzing for additions.  Poor investment organization makes it nearly impossible to determine whether portfolio diversification is consistent with risk tolerance and long-term investment goals. Fortunately, this too can be solved with an organized record-keeping system. With the right tools, the organized investor can identify the portfolio's diversification by asset type, as well as the diversification by stock industry sector, stock company size and mutual fund investment objective. Knowledge of diversification can help an investor build a portfolio for long-term success.

The various links below illustrate some of the record keeping and educational tools in BetterInvesting™ Portfolio Manager that act to improve your decision-making process once you've taken the steps to organize your investment records. Click on a thumbnail to learn more.