Portfolio Management and Investment Decision Making:

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  • This Microsoft PowerPoint presentation is designed to demonstrate how BetterInvesting Portfolio Manager Software can help you to improve your portfolio management decision making process, examining the software with several important functions required for successful portfolio management.
  • Portfolio management is often compared to gardening, because these two tasks are so similar. In order to have a thriving garden, careful considerations must be made during the planning , plant selection, and planting. Throughout the season, successful gardeners know to regularly to weed, feed, water and monitor. Diligence along the way, will generally lead to a bountiful harvest. Likewise, portfolio management is a multi-dimensional process. When designing a successful portfolio, you must identify your investment risk tolerance and investment objectives. Then your portfolio decisions require a careful selection of a mix of securities to meet those strategic objectives. Successful managers diligently monitor their portfolio for tactical rebalancing and ongoing security adjustments, never overlooking the tax consequences of their decision making. All of these important tasks help lead to rewarding returns. This presentation will demonstrate BetterInvesting Portfolio Manager’s many tools to help you be a successful portfolio manager.
  • BetterInvesting Portfolio Manager includes all the necessary tools necessary to help you make better portfolio management decisions. Including: Managing multiple portfolios Entering global transactions Fundamental analysis tools , including ratio analysis Instant access to Internet research Asset allocation analysis How to make tax effective decisions Other features
  • Managing Multiple Portfolios Investors often have several portfolios (accounts). For instance, you might have retirement accounts, currently taxable accounts, college savings accounts, accounts held at different financial institutions, etc. Allows for quick data entry and reconciliation from your records Portfolios are built by objective and purpose Portfolios can be easily combined when reporting for a total view
  • Collectively tracking all of your investment accounts with Portfolio Manager allows you to bring together investment account information from an unlimited number of sources. So, if you have multiple portfolio (accounts), at different financial institutions, Portfolio Manager allows you to compile that data in a single, secure location. They key is that you are able to collectively oversee your accounts, securely on your computer. You’ll find this feature not only to be time saving and convenient, it will also be much appreciated to those with whom you share your information.
  • Managing Multiple Portfolios Combining portfolios on Portfolio Manager’s reports provides a powerful tool to allow you to understand the “big” picture. This ability to selectively combine any of your portfolios on Portfolio Manager’s reports is as simple as selecting which portfolios to include on the Report Setup Screens. For instance, if you wanted to review a combination of your currently taxable account with your tax deferred account, simply select those two portfolios under the “Portfolios to Include” setup parameter. The report will be instantaneously created. Multiple portfolio management allows investors to: quickly analyze how the management of one of your portfolios, will affect your overall holdings. answer asset allocation and diversification questions. It is important to manage your portfolios individually, making smart portfolio specific decisions – i.e. which securities should be held in which type of account. It is equally important to know how all the pieces fit together, and how your portfolio holdings overlap.
  • Managing Multiple Portfolios The screen shows BIPM’s Appraisal Report which accumulates portfolio values, including costs, market vale, gains or losses and projected annual income. When a combination of portfolios is included on the report, it total view is clear . Answers to questions like: How much are all my holdings worth? Am I over concentrated? What is my projected portfolio income? How risky are my collective holdings (portfolio beta provides a volatility risk measurement)
  • The ability to combine your portfolios also allows you to evaluate asset allocation , risk and potential return. Review your asset allocations from an overall perspective: how portfolios “overlap” one another. am I diversified? does my asset mix match my match my risk tolerance an where I am in my life cycle Note: Typically, when investors are younger and in the accumulation phase, they are more accepting of risk seeking higher returns, having a greater percentage of their holding in stocks. As we get older, our tolerance of risk decreases, and investors move to a less risky asset mix – fixed income securities become a larger percentage of the portfolios. Remember, the importance to manage your portfolios individually, making smart portfolio specific decisions – i.e. which securities should be held in which type of account, portfolio income decisions, harvesting losses, etc. It’s equally important to know how all the pieces fit together, therefore you need a tool to collectively manage your holdings.
  • Effective portfolio management is multi-dimensional: investment selection, careful portfolio construction, and wise tax planning must all be considered to achieve better results. BetterInvesting Portfolio Manager includes the tools necessary to help you make these important decisions including: Managing multiple portfolios Entering global transactions How to use PRK’s fundamental analysis tools Use the power of Internet Asset allocation How to create security watch lists Other features
  • Entering Global Transactions Whether you are managing one or many portfolios, you will appreciate how Portfolio Manager handles global transactions. Portfolio Manager provides the ability to automatically adjust all portfolios holding a specific security affected by a global transaction, on a lot-by-lot basis . Global transactions include: Income Stock split Stock dividend distribution Spin-off Merger For instance, if you participated in a dividend reinvestment plan (DRIP) over the years, you would have many individual purchases of a stock. If that stock then declared a 2:1 stock split: Each individual lot must be adjusted to reflect the split. Each portfolio holding the stock would need similar adjustment.
  • Entering Global Transactions Recall global transactions are applied to all necessary portfolios , on a purchase lot-by-lot basis. In other words, if you had 10 different purchase lots of a security before the global transaction, you’ll have 10 different lots after the global adjustments have been made. There are five different types of global transactions: Income – apply a cash dividend to all portfolios holding the security. For instance, multiple portfolios hold Aflac. Aflac issues a quarterly dividend, and you would like to post that dividend to all portfolios simultaneously. Stock Split - apply a stock split to all portfolios holding the security (i.e., apply a 2:1 stock split to all necessary portfolios). Stock Dividend Distribution - apply a stock dividend distribution (i.e., 10% stock dividend) to all portfolios holding the security. Spin-off - apply a stock spin-off. Company A is held, and through a corporate reorganization, it spins-off company B to all company A shareholders. Holders of A now have both A & B. Merger - apply a company merger. Company A is held, and it merges into company B. All Company A holders exchange their stock for Company B. Portfolio Manager makes any of these adjustments globally accurately with just a few key strokes!
  • Entering Global Transactions Stock Split example screen (Transactions Menu | Global Transactions | Stock Split). Notice the summary of both before and after the application, and the ability to apply the split to all portfolios holding the security in question.
  • Entering Global Transactions Proper application of corporate spin-offs and mergers are mathematically complex transactions. Not only are the shares held adjusted, but the cost basis of each original lot needs a basis allocation adjustment too. Since manual adjustments are very error prone and challenging, investors often avoid these required adjustments, leaving their records incorrect. Incorrect records will not only lead to tax filing mistakes, any subsequent decisions would be based on incorrect facts. Imagine the time it would take to adjust each lot of a stock held in several portfolios, all having multiple purchase lots (i.e. DRIPs). With Portfolio Manager, you simply fill in the appropriate information as received from the issuing company, and in a matter of seconds, the program handles everything for you. Portfolio Manager will save you time and improve your accuracy., and lead you to sound decision making.
  • Entering global transactions: makes complex transactions simple to record with just a few entries improves the accuracy of complex record keeping reduces the time needed to accurately track your securities allows you to effectively manage multiple portfolios
  • Effective portfolio management is multi-dimensional: investment selection, careful portfolio construction, and wise tax planning must all be considered to achieve better results. BetterInvesting’s Portfolio Manager includes the tools necessary to help you make these important decisions including: Managing multiple portfolios Entering global transactions Fundamental analysis tools Use the power of Internet Asset allocation and diversification How to create security watch lists How to make tax effective decisions Other features
  • Fundamental analysis tools Having your records organized by portfolio allows you to better evaluate your investment holdings. Portfolio Manager also provides time tested fundamental analysis tools to help you make more informed investment decisions to identify risk/return potential. These include market and sector analysis, as well as analysis of company earnings, dividends, cash flows, book values, growth rates and more. The goal is to help investors identify under/over valued companies. Note: fundamental data can be downloaded from BetterInvesting, Imported (from AAII Stock Investor Pro), or manually entered.
  • This screen shows the data downloaded from BetterInvesting’s S&P Stock Data Feed. In Portfolio Manager, the data is used for fundamental analysis. The data includes: the annual earnings per share the estimated annual earnings per share for the next 12 months the estimated growth rate in earnings for the next five years the annual dividend rate per share the most recent reported annual book value per share the most recent reported annual cash flow per share the current dividend yield the beta coefficient the rating defined by S&P based on consistency of earnings and dividends over the last 10 years industry: designation for sector/industry size: designation for size based on revenues S&P Stock Data Feed available from BetterInvesting, at www.BetterInvesting.org for a low cost annual membership fee.
  • Portfolio Manager utilizes fundamental data (either via download, import or by manual entry), storing that information in its current asset library (Asset Library | Current Asset Library). The program then derives the following valuation ratios: · Current Yield : current dividend per share divided by current market price. · Cash Flow/Current Dividend : The cash flow/current dividend relationship is important because at times a company may not be "earning" their yearly dividend. · Dividend Payout Ratio %: this ratio shows what percentage a company is paying out its earnings (current dividends per share divided by current earnings per share). · Dividend Payout Ratio % 2: this ratio shows an estimate of the forward-looking company payout (current dividends per share divided by projected earnings per share). · Price/Earnings (P/E): perhaps the most frequently used ratio to judge the degree of valuation for a security, P/E is simply current market price divided current earnings per share. · Projected P/E: current market price divided by projected earnings per share. · PEG Ratio: one of the "Famous Numbers" from Peter Lynch's book One Up On Wall Street, this relationship compares earnings growth with the price/earnings ratio. · Market Price/Cash Flow per Share & Return on Cash Flow %: Market price/cash flow per share gives an indication of what ratio a stock is trading at in relation to the cash flow being generated. The inverse of the ratio can be used to derive the Return on Cash Flow %. · Market Price/Book Value per Share: the market price/book value ratio gives an idea of how security is trading in relation to its book value. · Return On Equity: this value shows how much is being earned each year by the company, where the higher the percent returned, the better for the investor.
  • Portfolio Manager also uses the fundamental data, stored within the asset library, for stock screening and data sorting. The asset library, which is a complete list of all securities held in any of your portfolios, can sorted and organized based on any of the fundamental ratios. For instance, if you are interested in examining the common stocks providing the highest current dividend yield, sort on that column: Move your mouse to the heading of the column and notice the pointer’s appearance changes to a down arrow. Double-click your mouse to re-sort the table on that column. Configure the table to display in ascending or descending order. Likewise, you can sort on P/E, PEG ratio, Cash flow, etc.
  • Effective portfolio management is multi-dimensional: investment selection, careful portfolio construction, and wise tax planning must all be considered to achieve better results. BetterInvesting’s Portfolio Manager includes the tools necessary to help you make these important decisions including: Managing multiple portfolios Entering global transactions How to use PRK’s fundamental analysis tools Asset allocation Use the power of Internet How to make tax effective decisions Other features
  • Asset Allocation and Portfolio Diversification An important part of the portfolio management process includes the asset allocation decision. Portfolio asset allocations are the single largest determinant of overall portfolio risk and return. Each investor will decide on the asset allocation mix based upon the investment goals of the portfolio, and the portfolio’s risk tolerance, often determined by your age. Regardless of the asset allocation decision, diversification helps to reduce specific risk – i.e., the risk of carrying too many eggs in one basket. Diversification is accomplished by holding an adequate number of securities Common stock investors should diversify by both industry sector and company size.
  • BetterInvesting’s website provides quick access to detailed data needed for the meaningful asset allocation and diversification analysis (data can be manually updated also). Common Stock Data: S&P Stock Data Service— online access to financial data provided by S&P on over 7,000 publicly traded companies including: stock industry sector stock size – large, medium or small capitalization Mutual Fund Data: access to Lipper mutual fund data on over 17,000 mutual funds including: asset allocation percentages (cash, bonds, stocks, other) diversification by industry sector diversification by stock size S&P Stock Data Feed and Mutual Fund Resource Center are available from BetterInvesting, at www.BetterInvesting.org for a low cost annual membership fee.
  • Including the proportional impact of your mutual funds holdings is a necessary feature to accurately determining your portfolio’s true asset allocation. In other words, if you own several mutual funds, along with individual securities in a portfolio, you need to know how the mutual fund’s allocation affects your portfolio’s allocation. Portfolio Manager will proportionally include, based on dollars invested in each fund, the impact of a fund’s characteristics along with the portfolios individual holdings. This ability to “drill down” to another level, provides you with a true asset allocation analysis of your portfolio.
  • Entering your target allocation percentages The portfolio allocation targets can be used to set target percentages for asset classes (i.e., cash, bonds, stocks and other) market values in relation to total portfolio market value. After the targets have been entered for the portfolio, you can generate several reports that will identify current portfolio allocation vs. your target portfolio allocations. These reports will also show both the percentage and the dollar amount variances, clearly indicating any portfolio rebalancing that may be needed. S&P 500 Portfolio (using the SPY index as a proxy for the S&P 500) sector targets can be downloaded by clicking on the Guidelines hyperlink. Then, adjust the percentages to your tactical preferences.
  • This is an example of the Asset Allocation Summary Report, providing an overview of the portfolio’s allocation. It shows current allocations, target allocations, and the rebalancing needed. Note: please recall that Portfolio Manager includes the proportional impact of your mutual funds holdings when determining the current asset allocation of the portfolio. This ability provides a true picture of the portfolio’s asset allocation.
  • This is another example asset allocation report for the portfolio, but this view shows allocation based on asset classes. It shows, in greater detail, current allocations, target allocations, and the rebalancing needed. Recall that asset class allocation is the major determinant of portfolio risk and return characteristics. More risky (i.e., volatile) portfolios are seeking a higher return, and frequently hold higher percentages of stocks. Lower risk portfolios often have higher percentages of fixed income securities. Portfolio Manager serves the valuable purpose to keep you focused on your asset allocations, so as your circumstances change, your portfolio can be adjusted accordingly.
  • This asset allocation report for the portfolio focuses on allocation based on common stock industry sector. It shows more detail regarding current allocations, target allocations, and the rebalancing needed. Sector analysis is used to watch that your portfolio doesn’t become overly concentrated in a particular sector, exposing you to unnecessary risk. So if your exposure deviates outside your target (i.e., by +/- 5%), you might consider bringing your holdings back into balance. Savvy investors also frequently monitor sector allocation to “tactically” rebalance portfolios to take advantage of current market conditions. For instance, if you view the financial sector as being oversold (temporarily mispriced), you might increase your exposure to that sector. Likewise, if a sector has become overly owned, appropriate adjusts would be made.
  • This is an example of an asset allocation report for the portfolio based on common stock size – large, medium or small capitalization. It shows current allocations, target allocations, and the rebalancing needed. The capitalization size of a firm also affects a stock’s risk and return characteristics. Smaller firms as a group, are generally more risky than large firms, and therefore should provide a higher return. Stocks of similar size also tend respond alike to macroeconomic conditions, but differently than those of other capitalization sizes. Therefore, diversification across different stock sizes may help to reduce portfolio risk while increasing portfolio returns.
  • Effective portfolio management is multi-dimensional: investment selection, careful portfolio construction, and wise tax planning must all be considered to achieve better results. BetterInvesting’s Portfolio Manager includes the tools necessary to help you make these important decisions including: Managing multiple portfolios Entering global transactions How to use PRK’s fundamental analysis tools Asset allocation & diversification Internet Tools How to make tax effective decisions Other features
  • Internet Research tools within Portfolio Manager Portfolio Manager provides easy access to several Internet based research tools, and to a wide range of common stock information. The following examples will use L-3 Communications Corporation to demonstrate Portfolio Manager’s Home Page access to these Internet Resources. *: User must be a BetterInvesting member, which includes access to BetterInvesting’s S&P Data Feed service.
  • Internet Research tools within Portfolio Manager The slide shows part of the company information available from BetterInvesting’s Online SSG page. (L-3 Communications is shown for example purposes only)
  • Internet Research tools within Portfolio Manager The slide shows part of the company information available from BetterInvesting’s Company Report page. (L-3 Communications is shown for example purposes only)
  • Internet Research Likewise, Portfolio Manager provides users with easy, free access to Yahoo! Finance. This valuable resource will lead investors to a host of investment research, powerful graphing, and much more. (This partial shot of the Yahoo!® Finance page for L-3 is meant for example purposes only.)
  • Effective portfolio management is multi-dimensional: investment selection, careful portfolio construction, and wise tax planning must all be considered to achieve better results. BetterInvesting’s Portfolio Manager includes the tools necessary to help you make these important decisions including: Managing multiple portfolios Entering global transactions Fundamental analysis tools Asset allocation Internet tools Using security watch lists E ffective tax decisions Other features
  • Tax Planning within Portfolio Manager Portfolio Manager helps investors: identifying which securities lots to use when selling securities offset previous gains or losses to manage tax bite deciding which securities to hold in taxable or tax-deferred accounts which securities should be held in which accounts, i.e. taxable vs. nontaxable accurate cost basis knowledge is required when gifting securities deciding which securities to gift to someone else
  • Tax Planning and Portfolio Manager When an investor sells part of a security’s total position, the Internal Revenue Code allows an investor to select which purchase lots to use in the sale application. This is important because each lot will normally have a different cost. Therefore, when you sell, you can manage the realized capital gain (the difference between the cost and the sale amount), based on which lots you select to use in the sale. Portfolio Manager’s Security Basis Report helps you to identify which lots you wish to use in the sale of the security. For instance, if you have already realized gains (see Portfolio Manager’s Sold Report), then you might wish to minimize additional realized capital gains (or realize losses to offset against those gains if losses are available). If so, you would select the highest cost lots to be used in the sale. Alternatively, if you have already realized losses, then perhaps you might select your lowest cost lots to use in the sale, thereby generating the most capital gain on the sale. NOTE: Portfolio Manager can set up to use Canadian Revenue Agency rules for average cost basis.
  • Tax Planning After deciding on which lots to use in the sale, Portfolio Manager makes the implementation of your decision easy and accurate…On the sale screen, you can select to use one of the following application methods: Minimum Gain: use this choice to automatically sort holdings and allocate the sale to result in the minimum dollar gain realized. Maximum Gain: use this choice to automatically sort holdings and allocate the sale to result in the maximum dollar gain realized. First-In First-Out: apply a sale transaction using the first-in first-out method, security lots are automatically sorted and reduced by holding period, starting with the oldest lot held, then the next oldest, and so on, until the sale is totally applied. Specific Identification: apply a sale transaction using the specific identification method, you have the flexibility of applying the sale to specific asset lots held in order to maximize or minimize any associated gains or losses for tax purposes. Average Cost: in the sale application of mutual funds, Portfolio Manager enables you to choose between the unit cost paid, or the average cost paid, to determine the capital gain or loss realized. Either the single-category average basis , or double-category average basis can be selected. Note: Portfolio Manager can be customized to use Canadian tax rules.
  • Tax Planning and Portfolio Manager We have already seen the usefulness of the Security Basis and Sold Securities Reports for making informed tax decisions when managing your portfolio. Portfolio Manager also provides the following tax decision making reports: Capital Gains Distributions Report : summarizes the gain distributions received by securities in your portfolio. Qualified Dividends Report : identifies which taxable dividends received are qualified or non-qualified, as required by the new 2003 tax law changes. Short-Term to Long-Term Holding Period Report : summarizes those security lots within a portfolio that are about to become long-term as defined by IRC tax rules (greater than 1 year holding period). Wash Sale Check List Report : tabulates sold securities with a realized capital loss, and identifies when the IRS Wash Sale period expires (30 days after the sale date).
  • Effective portfolio management is multi-dimensional: investment selection, careful portfolio construction, and wise tax planning must all be considered to achieve better results. BetterInvesting’s Portfolio Manager includes the tools necessary to help you make these important decisions including: Managing multiple portfolios Entering global transactions Fundamental analysis tools Asset allocation Internet Tools Using security watch lists Effective tax decisions Other features
  • Create unique watch lists within Portfolio Manager to improve the portfolio management process. Doing so will allow you to: Setup multiple lists of securities to monitor Organize lists by type of security – unique watch lists for large, medium and small cap stocks… unique watch list by industry sector… unique watch list buy objective: retirement accounts vs. currently taxable… Use these lists when you need to “go to the bench” for replacements! Share watch lists with club members and friends – build better watch lists! Use watch lists, and Portfolio Manager’s combined reporting tools, to test how additions to your portfolios will affect existing portfolios: how will diversification be affected… what impact will proposed addition have on asset allocation… what impact on portfolio income and taxes…
  • Portfolio manager provides many other portfolio management and decision making tools including: Performance measurements for portfolios and securities (Reports Menu | Performance Report) Calculate the internal rate of return as of any date, or for any date range (historic asset library must include those dates). Security Search Report (Reports Menu | Portfolio Reports | Audit) quickly cross reference all portfolios Export reports to other applications (Found on report preview Toolbar) Choose from popular formats including PDF, CSV, XLS and others Price alerts (Asset Library | Price Alerts) can be specifically set or globally – i.e., set all upper alerts 10% above current prices and lower alerts 15% below current prices.
  • Portfolio management is often compared to gardening, because these two tasks are so similar. In order to have a thriving garden, careful considerations must be made during the planning , plant selection, and planting. Throughout the season, successful gardeners know to regularly to weed, feed, water and monitor. Diligence along the way, will generally lead to a bountiful harvest. Likewise, portfolio management is a multi-dimensional process. When designing a successful portfolio, you must identify your investment risk tolerance and investment objectives. Then your portfolio decisions require a careful selection of a mix of securities to meet those strategic objectives. Successful managers diligently monitor their portfolio for tactical rebalancing and ongoing security adjustments, never overlooking the tax consequences of their decision making. All of these important tasks help lead to rewarding returns. As you have seen, BetterInvesting Portfolio Manager provides you with the tools needed for portfolio management success.
  • Thank you for taking the time to review this PowerPoint ® Presentation. If you do not yet own Portfolio Manager, we encourage you to download and try the 45 day free demo version – any data entered into the demo can be saved for use in the full version. If you have questions regarding Portfolio Manager, please – visit BetterInvesting’s web site @ www.betterinvesting.org visit the software’s web site @ www.biportfoliomanager.com Call BetterInvesting @ 877-275-6242 ext. 4 Call the developers: QUANT IX SOFTWARE @ 262-241-3990 Other PowerPoint presentations are available: www.biportfoliomanager.com/power_point.html
  • Portfolio Management and Investment Decision Making:

    1. 1. BetterInvesting Portfolio Manager Improving Portfolio Management Decisions Created by: QUANT IX SOFTWARE, Inc. Revised: July, 2008 We suggest you print the matching PDF file for this presentation to follow the notes discussion for this slide show.
    2. 2. <ul><li>Portfolio Management is like gardening… </li></ul><ul><ul><li>Design </li></ul></ul><ul><ul><li>Select </li></ul></ul><ul><ul><li>Maintain </li></ul></ul><ul><ul><li>Harvest </li></ul></ul>
    3. 3. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making How BetterInvesting Portfolio Manager helps
    4. 4. Managing multiple portfolios: centralized, secure management of all your investment accounts… <ul><li>Ability to track an unlimited number of portfolios </li></ul><ul><ul><li>Portfolios are unique, each with its own transaction database </li></ul></ul><ul><ul><li>Portfolios segregated by: </li></ul></ul><ul><ul><ul><li>Owner </li></ul></ul></ul><ul><ul><ul><li>By objective </li></ul></ul></ul><ul><ul><ul><li>By financial institution </li></ul></ul></ul><ul><ul><li>Portfolios easily combined for collective reporting </li></ul></ul>
    5. 5. Collectively monitor your accounts… Portfolio Manager provides multiple portfolio tracking. Manage your accounts collectively, without limitations.
    6. 6. Combination reporting: a customized view Select which portfolios and which asset types to include on a report.
    7. 7. Combined reports provide important information A report showing a combination of Joe’s accounts – both his taxable portfolio and his IRA.
    8. 8. Combined reports provide important information Shown here, one of the allocation reports, summarizing both of Joe’s accounts.
    9. 9. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making
    10. 10. Entering global transactions <ul><li>Global transactions are those that affect each portfolio holding a specific security </li></ul><ul><li>Portfolio Manager adjusts each security, in each portfolio, on a lot-by-lot basis </li></ul>Accuracy, with efficiency, saves time for decision making.
    11. 11. Global transactions are applied to all portfolios holding the issuer of: <ul><li>Income – a cash dividend (i.e., quarterly cash dividend paid) </li></ul><ul><li>Stock split – a stock split (i.e., 2 for 1 stock split) </li></ul><ul><li>Stock dividend distribution – a stock dividend (i.e., 10% dividend distribution) </li></ul><ul><li>Spin-off – a corporate reorganization ( Company A issues shares in Company B) </li></ul><ul><li>Merger – a corporate reorganization (Company C acquires Company D) </li></ul>
    12. 12. Example – several portfolios hold a company issuing a stock split (for illustrative purposes only) … All portfolios within Portfolio Manager are quickly and accurately adjusted
    13. 13. Example – several portfolios hold a company issuing a corporate spin-off (for illustrative purposes only) …
    14. 14. Entering global transactions <ul><li>Accurate record keeping is an essential element for effective portfolio management. With Portfolio Manager ’ s global transaction abilities, you ’ ll spend less time number crunching, leaving more time for investment decision making. </li></ul>
    15. 15. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Using Security Watch Lists Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making
    16. 16. Using Portfolio Manager’s Fundamental Analysis Tools <ul><li>Fundamental security analysis – to evaluate a firm and its investment potential based on the firm’s financial strength, earnings potential, management, and it’s sensitivity to both it’s industry sector and the overall economy. </li></ul><ul><li>Fundamental analysis involves overall market analysis, industry sector analysis, specific company analysis, and portfolio management. </li></ul>
    17. 17. Importing fundamental data from BetterInvesting <ul><li>Automatically download S&P stock data from BetterInvesting </li></ul><ul><ul><li>S&P Stock Data Service — online access to CompuStat financial data provided by S&P on over 7,000 publicly traded companies </li></ul></ul>
    18. 18. Utilizing fundamental data for ratio analysis <ul><li>This table shows several of the valuation ratios derived within Portfolio Manager </li></ul><ul><li>(Asset Library) </li></ul>
    19. 19. Screening and sorting securities based on fundamental data <ul><li>The asset library can be sorted based on any of the valuation ratios. </li></ul><ul><li>Here we demonstrate the list sorted on dividend yield, highest to lowest. </li></ul>
    20. 20. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making
    21. 21. Asset Allocation and Portfolio Diversification <ul><li>Asset Allocation </li></ul><ul><ul><li>Combining asset classes such as stocks, bonds, and cash in a portfolio in order to meet your investment objectives </li></ul></ul><ul><li>Portfolio Diversification </li></ul><ul><ul><li>Spreading portfolio assets over sufficient number of securities to avoid excessive risk from any one security </li></ul></ul><ul><ul><li>Common stocks should be diversified by industry sector and company size </li></ul></ul>
    22. 22. Importing allocation and diversification data from BetterInvesting <ul><li>Importing BetterInvesting Mutual Fund Resource Center data updates Portfolio Manager with important characteristics of your funds for asset allocation, diversification and performance analysis </li></ul>
    23. 23. Asset Allocation and Portfolio Diversification <ul><li>Important point: Portfolio Manager will show the proportional impact of all securities within your portfolios, include your mutual funds ’ asset allocation and diversification characteristics. This ability </li></ul><ul><ul><li>Provides true asset allocation and diversification analysis </li></ul></ul><ul><ul><li>Identifies rebalancing needs </li></ul></ul>
    24. 24. Setup your portfolio allocation targets … <ul><li>Portfolio Manager allows you to set your portfolio target allocations ( File Menu | Portfolios | Portfolio Targets) </li></ul><ul><li>These targets are used to compare your objectives with the actual allocation </li></ul><ul><li>Use the Guidelines to download data for the composition of the S&P 500 </li></ul>
    25. 25. Compare your targets to actual allocation and diversification: here an overall summary of the portfolio.
    26. 26. Compare your targets to actual allocation and diversification: here a look at the portfolio’s different asset classes.
    27. 27. Analyze your targets to actual allocation and diversification: here by stock industry.
    28. 28. Compare your targets to actual allocation and diversification: here by stock size.
    29. 29. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making
    30. 30. Using the Internet with Portfolio Manager <ul><li>Internet research </li></ul><ul><ul><li>Quick access to useful web sites </li></ul></ul><ul><ul><ul><li>BetterInvesting’s Online Stock Selection Guide (SSG) </li></ul></ul></ul><ul><ul><ul><li>BetterInvesting’s Company Report </li></ul></ul></ul><ul><ul><ul><li>Yahoo! ® Finance </li></ul></ul></ul><ul><li>From Portfolio Manager ’ s home page, right click access to any security listed under Portfolio Holdings section </li></ul>
    31. 31. BetterInvesting’s Online Stock Selection Guide (SSG) report (partial screen) <ul><li>The BetterInvesting Stock Selection Guide ( SSG ) is a tool that provides a framework to analyze and evaluate prospective common stock investments, based on the firm’s fundamental data. </li></ul><ul><li>Find growth stocks trading at a reasonable price. </li></ul>FOR ILLUSTRATIVE PURPOSES ONLY!
    32. 32. BetterInvesting’s company report (partial screen) <ul><li>BetterInvesting ’ s S&P Data Feed provides access to wide range of very useful company information </li></ul><ul><li>This screen shows a partial view of the information that is available: </li></ul><ul><ul><li>S&P Stock Data Service— online access to financial data, provided by S&P, on over 7,000 publicly traded companies. </li></ul></ul>FOR ILLUSTRATIVE PURPOSES ONLY!
    33. 33. Easy access to Yahoo! ®Finance is also just a click away from Portfolio Manager’s home page <ul><li>Yahoo! ® Finance provides it ’ s users with access to a wide variety of free investment information. </li></ul><ul><li>Yahoo! ® Finance’s highly useful website, provides very valuable resources (this screen shot shows just a small snippet of the information available) for inquisitive investors. </li></ul>FOR ILLUSTRATIVE PURPOSES ONLY!
    34. 34. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making
    35. 35. Making effective tax decisions with Portfolio Manager <ul><li>One of the many benefits of an accurate and up-to-date record keeping system is the ability to access otherwise unorganized data in an useable format. </li></ul><ul><li>This is particularly important when considering the tax consequences of your investment decisions. </li></ul><ul><li>Portfolio Manager helps by providing: </li></ul><ul><ul><li>Lot-by-lot assignment when making partial sales </li></ul></ul><ul><ul><ul><li>FIFO, Specific ID, Average Cost Methods, Minimum or Maximum gain </li></ul></ul></ul><ul><ul><li>Effective portfolio construction </li></ul></ul><ul><ul><ul><li>taxable vs. tax-deferred account </li></ul></ul></ul><ul><ul><li>Help with gift and estate planning decisions </li></ul></ul>
    36. 36. The Security Basis report shows each purchase lot for the portfolio or a security…
    37. 37. Lot selection to use in partial sales can help to defer or save capital gains taxes Applying sales in easy Simply select the method and Portfolio Manager will handle the rest
    38. 38. Portfolio Manager provides several other reports to help investors better manage portfolios <ul><li>Other tax reports include : </li></ul><ul><ul><li>Capital Gains Distributions </li></ul></ul><ul><ul><li>Qualified Dividends </li></ul></ul><ul><ul><li>Short-Term to Long-Term Holding Period </li></ul></ul><ul><ul><li>Wash Sale Check List </li></ul></ul>
    39. 39. Topics : Managing Multiple Portfolios Entering Global Transactions Fundamental Analysis Tools Asset Allocation Internet Tools Using Security Watch Lists Effective Tax Decisions Other Features Improving Portfolio Management and Investment Decision Making
    40. 40. Creating and using a watch list within Portfolio Manager <ul><li>Using watch lists can improve the portfolio management process: </li></ul><ul><ul><li>Provide alternate investment lists for building or modifying portfolios </li></ul></ul><ul><ul><li>Track and compare similar securities within a watch list </li></ul></ul><ul><ul><li>Share watch lists with family, friends, and associates </li></ul></ul><ul><ul><li>Allow for effective “what-if” testing </li></ul></ul><ul><ul><ul><li>What impact on asset allocation, diversification, taxes due, income received, etc. </li></ul></ul></ul>
    41. 41. Portfolio Manger provides a host of other tools and features to improve decision making <ul><li>Integrate other BetterInvesting tools – data, SSGs, </li></ul><ul><li>Detailed option tracking including opening/closing buys, sells, assignment, exercise </li></ul><ul><li>Short Selling </li></ul><ul><li>Performance reporting - determine the time-weighted internal rate of return </li></ul><ul><li>Security search reports - find all portfolios holding a security </li></ul><ul><li>Price alerts </li></ul><ul><li>Export reports to other applications </li></ul><ul><li>And many more important tools... </li></ul>
    42. 42. <ul><li>Managing your portfolio is like tending to your garden. </li></ul><ul><li>BetterInvesting Portfolio Manager will help make the process understandable, enjoyable and rewarding. </li></ul>
    43. 43. To learn more, please visit : www.biportfoliomanager.com (free 45 day demo available) www.betterinvesting.org QUANT IX SOFTWARE, Inc. 1035 West Glen Oaks Lane Suite 204 Mequon, WI 53092 262-241-3990 Thank you for your interest in Portfolio Manager

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