Understanding the market is always tricky, and even a little risky. After all, if you could instantly know whether something was guaranteed to be a wise investment decision, everyone would be rich! Both individual investors and professional investment advisors need to know how to best examine and analyze portfolios for mutual funds, ETFs, and similar investment vehicles.
That’s where innovative portfolio analyzer tools like Personal Fund come into play. Let’s break down five key benefits of using a portfolio analyzer so you can determine whether you should start using one of these tools ASAP.
Make Smarter Market Decisions
Firstly, a portfolio analyzer tool enables you to make much smarter market decisions than you might otherwise. Smart market decisions are difficult to make repeatedly, even if you initially get lucky.
With this tool, you’ll know:
- Whether investing in one fund or another is wise
- Whether a particular fund, like an exchange-traded fund, is performing as well as it seems, or if smoke and mirrors are masking its true performance
- Which types of portfolios are best for your financial goals, budget limitations, and other factors
All of these smart market decisions will help maximize your investment dollars in terms of their market lifespans and their returns. Even better, portfolio analyzer tools can become more useful as you learn how to use them to their maximum extent. Practice with the same tool for a little while, and you’ll make wiser market decisions over the years.
Furthermore, portfolio analyzers may help you minimize the risks to your portfolios. By identifying which ETFs, mutual funds, and other portfolios are less than ideal, you’ll avoid:
- Putting too much of your money into overly risky funds or portfolios, thus losing money
- Making unwise market decisions due to gut instincts or following the crowd. Lots of investors make poor decisions because “everyone else is doing it” not because the numbers say it’s a good idea
- Spending too much money on one fund or portfolio. Regardless of your financial goals, it’s always wise to diversify your investments when possible
Minimizing risks is arguably more important than earning as much money as you can when it comes to playing and winning in the stock market.
Identify Hidden Fees & Costs
But that’s not all a portfolio analyzer can do. As another benefit, it can identify any hidden fees or costs. Many funds have higher price tags than they advertise due to fees, hidden expenses, and other drains on your income.
None of these are fees you should be forced to pay. The right portfolio analysis tool can reveal these hidden expenses and allow you only to put your money in funds that advertise their true costs or whose costs are worth their projected returns.
Naturally, a portfolio analyzer can and often will help you maximize your profits, provided you listen to its projections and feed it accurate information. A well-designed portfolio analyzer can:
- Point you toward mutual funds and other investment vehicles that offer consistent returns on investments
- Direct you toward the funds that best match your investment goals, such as short-term and aggressive growth or long-term, retirement-oriented growth
Both of these benefits are important if you want to cultivate and maintain excellent stock market performance. With a portfolio analyzer, you can leave a lot of your decisions up to the numbers rather than trying to pierce the obscurity of the market by instinct.
Ensures Your Market Position Reflects Your Goals
Even experienced investors don’t always make the wisest investments per their stated investment goals. For example, people saving for retirement may put too much of their money in risky ETFs, losing more than they can afford in the process.
Once you feed your chosen portfolio analyzer your investment goals, it can help you put your money only into funds or investment vehicles that reflect those goals. No longer will you accidentally funnel money into risky mutual funds that have just as much of a chance of going bankrupt as they do striking it rich if you want to retire on time and in comfort.
Even better, many good portfolio analyzers allow you to adjust your goals as you age or as you earn more money. With robust, comprehensive tools, you can constantly adjust your portfolio based on the money you bring in and on market shifts.
Take Charge of Your Portfolio
In the end, a portfolio analyzer like Personal Fund is the best tool to maximize your returns and to prevent yourself from making subpar investment decisions. Whether you have tons of stock market experience or are a newcomer to investing, a portfolio analyzer can help you choose the perfect mutual funds for both short and long-term gains.