Value Research's portfolio-monitoring system - My Investments - has a lot to offer. Here's a glimpse of one of its most interesting features - Dashboard.
06-Jan-2022 •Ashutosh Gupta
Your investment-related decisions very much hinge on how you track your investments. And when it comes to tracking your investments, you need to use the right inputs. After all, if the inputs are inferior, so will be your decisions based on them. Precisely, this is where our 'My Investments' tool comes into play as a great enabler for every investor.
Crafted, curated and perfected over more than two decades, the tool has been the backbone of investment tracking and decision-making for an entire generation of mutual fund investors. And in its latest avatar, it has become even more powerful and cutting edge in offering valuable insights.
Remember we talked about the signal-to-noise ratio in the October 2021 edition of 'Mutual Fund Insight'? The tool can filter out the noise and amplify the signals so you stay on track with your investments. And it's not rocket science. It is all based on simple-yet-effective and time-tested principles of investing that we have been advocating for over the last three decades.
The net result is that you get the most comprehensive and the most relevant insights and information to aid your investment decision-making and mend your investment behaviour, if required.
Let's gain insights into some of its most cutting-edge features and how they can help investors.
The 'Dashboard' view, which is also the landing page, provides a snapshot of what we believe are the most important bits of information (signals!) that you need to know about your investments. This page displays a few carefully selected infographics that also serve as lead-ins to the other sections of the tool. But more importantly, this set of infographics summarises how well you are doing as an investor and helps you identify the problem areas.
Unlike many other investment trackers, our Dashboard page doesn't flash 'Top gainers of the day' or some other high-frequency numbers on your face. And therefore, some users may find it dull and boring. But we believe that being dull and boring is an advantage. Isn't that what investing is all about, after all?
Here's how our Dashboard delivers the real insights:
1) The asset-allocation pie chart: Long-time readers of Value Research understand that asset allocation is the most fundamental determinant of your success in achieving your investment goals. The pie chart tells you where you stand on asset allocation. As a long-term investor, if a bulk of your money is invested in debt securities, you need to make amends and pivot towards equity. Besides, if you are investing with a pre-decided asset allocation, this graphic serves as a call to action whenever you see your actual allocations deviate from the target one by more than 5-7 per cent.
2) Inflation-adjusted returns: This should be an eye-opener for investors who have never ventured out of the comfort of fixed deposits. The inflation-adjusted returns of just about 1-1.5 per cent (or even lower) that they are likely to see on their portfolio should break their illusions of high fixed-income returns. On the contrary, despite being a long-term equity investor, if you have failed to generate inflation-adjusted returns of 4.5-5 per cent at the very least through your investments, this graph should nudge you to investigate the root cause. It is likely linked to poor selection of funds/stocks or a lack of investing discipline (trying to unsuccessfully time the market, inopportune entry and exits, which lead to poor outcomes).
3) The 'suitability' infographic: This is basically a reflection of your asset allocation depicted in no. 1 above and tells you what outcomes you should expect from your existing portfolio in the long run. For instance, if your aim is to build wealth in the long-run but this graphic reads 'Barely beating inflation', be forewarned that you are setting yourself up for failure. That's your signal to tune up your equity allocation. Conversely, if you are saving to make the down payment of your house in the next six months but this infographic shows that your portfolio is geared for 'Aggressive growth', you need to scramble out of equity investments.
4) Capital gains and interest income: It gives you a quick view of the capital gains and income you have already booked in the current financial year and the likely tax arising from it.
5) Incremental investments graph: How often have you heard us say that you are not going to get rich if you do not save enough? And how often do you come across investors who started an SIP several years ago and never bothered to increase their monthly investments even as their incomes grew substantially? Well, this graphic is a revelation for many investors. It can leave you overjoyed or in a state of distress, depending upon the slope of the bar graphs. We have said time and again that your investments should keep pace with your income and if this graph shows a steady rise in the amount invested year after year, feel happy about it, as you are on the right track. But if you see it stagnated, or worse, declining over the years, be alarmed. You need to fix it. No matter how meticulous you are with your asset allocation or how good you are at picking funds, if you are not investing enough in the first place, you are not going to reach anywhere. So, pay attention to what this bar graph says about your investing habits.
There is more to the story. Read it here.