In 2022, the US stock market was worth around $40 trillion, with 56% of American adults holding such securities. Despite popular opinion regarding the complexity of this trading area, many somewhat financially unsavvy people are still interested in it due to the money-stability allures and wealth potential it brings. And a tool that comes in super handy in these pursuits is a multi-currency portfolio tracker, which is a must, particularly if one owns assets in a foreign country.
Standard portfolio trackers give investors a decent big picture regarding how their investments are doing. But they eat up valuable time regarding traders having to manually convert currency, in addition to juggling multiple online accounts, creating and monitoring spreadsheets, and more. Without question, exchange rate fluctuations can make life hell for inexperienced traders and cause them to lose a handle on trades at every turn. That is why an absolute multi-currency portfolio tracker is a necessity. It helps those deep into financial markets keep track of their funds in a currency familiar to them. Below, we explain what goes into selecting an adequate one.
Table of Contents
Consider Your Investment Needs & Goals
Investing can have multiple end-games. A popular one is enjoying a stress-free retirement, and a competitor is accumulating impressive riches in a span of a few years.
Undoubtedly, the ways one can put their saved money to work continually increase, and each approach can get categorized according to three fundamental characteristics. They are income, safety, and growth. Naturally, in investing, there is no such thing as a sure thing, as every trade comes with a specific amount of risk attached. And to get steady income streams, most investors are ready to accept a bit more risk. That is unavoidable.
It is vital to note that secondary goals in the process usually exist, and when investing in securities is in question, two very established ones are liquidity and tax minimization. Liquidity refers to holding assets that can quickly get converted to cash. And pursuing tax minimization is making investments with favorable tax treatment to lessen the overall income take the government pockets.
What one must review when they have an investment aim set in mind gets elaborated below, the top three priorities that should also come into play in tracker selection.
Types of Investments You Own
Committing to a timeline and choosing the level of risk tolerance one is willing to accept in investing are the main two steps in putting one’s money to work, as everyone needs to give their funds time to grow and compound. Then comes selecting the types of investments one needs to stack their portfolio with, and the Pareto Principle is something that everyone starting should know. Also called the 80/20 rule, it operates under the assumption that in life, 80% of results come from 20% of the effort put into an endeavor.
Asset allocation is the practice of putting capital into several categories of investment that are not correlated in their price action, assisting in mitigating risk. Another rule that most investors used to look to follow is the 60/40 one, which states that 60% of the money should get put towards stocks, while 40% should go into bonds. Going by the opinion of most experts, this is a mundane approach to growing funds without taking sizeable risks.
Stocks not factored in, other reasonable safe investments with high returns are certificates of deposit, treasury bonds, municipal bonds, corporate bonds, ETFs, and money-market accounts.
Geographic Diversification
It means nothing more than holding securities from different regions. In multi-currency investments, that is a given. Nonetheless, in general, investors do not want to have all their assets based in one country for the same reasons as no one keeps their money in one stock. If that security experiences a failure, that is more or less a deadly blow to one’s portfolio. Hence, geographic diversification is a method to reduce risk by avoiding excessive market concentration.
Currency Risk Management
What is it? It is a process that lets firms protect themselves from currency risk. It does this by facilitating control of its competitiveness via capturing opportunities from selling and buying in various currencies.
Remember, exchange rate fluctuations happen daily. That is why currency risk management is vital. The types of risks involved here get listed as multiple types of exposures. They are transaction, translation (also known as exchange rate), and economical. To mitigate these, companies usually engage in natural foreign exchange hedging, which acts as an insurance form, an instrument to protect from loss stemming from movements in exchange rates. In short, it is a deal to sell or buy currency at a predetermined rate at a distinct date sometime in the future. So, look for apps with currency risk management tools.
Evaluate the Features of the Tracker
When picking a portfolio tracker, an investor usually appraises its quality by looking over what it provides, feature-wise. The chief points of interest get outlined in this sub-heading.
Multi-Currency Support
Here is a no-brainer. Though a tracking app should not only have this function, it should also supply automatic currency conversion, the managing of foreign exchange holdings (Forex), and the option to monitor crypto investments and check on multiple portfolios simultaneously.
Real-Time Data Updates
That occurs thanks to an app linking to an exchange’s data stream, receiving information directly from the source or a top-end financial media outlet. That permits users to see currency price changes as they happen.
Portfolio Performance Analysis Tools
The ones veteran investors value most have the ability to create and complexly organize watchlists and charting capabilities. The latter usually includes building charts in separate windows that incorporate multiple charting styles with different technical indicators.
Check the Compatibility with Your Broker & Financial Institutions
The ones veteran investors value the most are the ability to create and complexly organize watchlists and charting capabilities. The latter usually includes building charts in separate windows and incorporating multiple charting styles that have different technical indicators.
Integration with Major Brokerage Firms
Tracker apps with decent sector standing with vast user pools have a direct connect method, also known as OFX, that facilitates importing data from over seventy US brokerages. It lets investors download data instantly into such portfolio tracking/managing software. And for non-US brokerages, there are advanced import methods doing this job with QIF/ QFX, CSV file importation, or inputting the necessary information manually. That is possible with thousands of worldwide brokerages.
Support for Multiple Financial Institutions
In the simplest terms, this means that a tracking app can monitor holdings across several accounts at different institutions, such as brokerage firms, on one screen, offering harmonious integration.
Compare the Pricing and Fees
In the early 2000s, only a few reputable trackers existed online. Before this era, such software got reserved primarily for use in brokerages, who could afford its drastic costs. Yet, at the tail-end of the 1990s, commercially available options appeared. Today, there are dozens of viable alternatives for mid-level investors who want to monitor the health of their trades themselves and who wish to conduct them personally.
Of course, variety is present in this field, and not all the software on hand for purchase offers the same number of features for the same price. Examples of this get illustrated here.
Monthly/Annual Subscription Fees
StockMarketEye ranks as one of the older but more credible tracker options. It has all the options mentioned above and can sync to different iOS/Android financial apps, supplying a bird’s eye view of one’s portfolios and allowing investors to take 100% control of their investment decisions for a price of 74.99$ per year.
Kubera is another terrific option that comes at double the cost for personal investors of StockMarketEye (150/annually). It gets favored by many because it can track assets like domain names, trademarks, collectibles, and everything else whose value is possible to get digitally monitored. It has some of the best online bank account connectivity in the industry. That is due to it using multiple aggregators like Salt Edge, Lean, Akahu, Yodlee, and Plaid to connect to multi-currency crypto wallets, brokerages, bank accounts, and fintech apps globally. Kubera lists a $225 annual family plan. And it has a $150 monthly one for portfolio managers and financial advisors.
Seeking Alpha is another hailed choice from this investment software batch. It launched in 2004 and delivers portfolio oversight via valuation metrics and a range of educational content such as stock idea feeds, podcasts, newsletters, and more. Its basic plan is free, but its true potential lies in the software’s premium plan ($19.99/year or $29.99/month).
Additional Fees for Premium Features
For those more serious regarding their investment future, many tracking picks on the market list additional features for a price. These offer a comprehensive analysis that aims to remove the guesswork from investing. They cater to intermediate and advanced investors by giving them earnings call transcripts, decade’s worth of financial statements, author securities ratings, and dividend forecasts.
Parting Thought
Multi-currency portfolio trackers are mandatory for those who choose to invest in assets from multiple countries. Know that the best ones are compatible with renowned brokerages, permit simple data importation, have robust analysis features, and allow crypto monitoring in real time. They are an invaluable tool for any serious investor.
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