Share portfolio management

Looking for a better way to manage your share portfolio? Relying on an excel spreadsheet to do this can become a very time-consuming process with lots of room for error.

Instead, a dedicated share tracking platform can save you time, help with tax reporting and give you a more accurate picture of your portfolio.

What is portfolio management?

Investing in shares isn’t a set-and-forget strategy. Share prices can be quite volatile and are constantly going up and down, so it’s important to track your shares closely so you can make changes to your portfolio when needed. This is known as portfolio management.

Portfolio management is the process of continually monitoring the value of your shares and making ongoing decisions based on their price movements. For example, if your shares in one company are falling quite heavily, you might decide to sell them and buy some other shares instead.

Portfolio management also involves keeping on top of all your tax obligations, such as reporting any realised capital gains or losses and dividend payments.

How to manage a share portfolio

There are a few different strategies for managing a share portfolio. Which one you choose will depend on the value and complexity of your portfolio, how much time you have and your budget. Some of these options include:

• Excel spreadsheet. If you’re new to share trading and you only have a few holdings (for example fewer than 10) you could opt to track your share portfolio in a simple excel spreadsheet. This option is free, but it can become time-consuming and leave room for error. It also won’t track or update any share prices for you.
• The portfolio tools offered by your broker. Your online share trading platform will likely offer a range of basic portfolio tracking tools. However, these are often limited to tracking the performance of your shares only and often don’t include things like tax reporting tools and dividend payment tracking.
• Professional financial planners. If you’ve got a large, complicated portfolio of shares as well as other assets you could opt for a paid, professional financial planner to manage your portfolio for you. This option can be quite expensive and is more suited to high-net-worth investors.
• Portfolio management platforms. If you’re somewhere in between these options, for example you have more than a few holdings but your portfolio isn’t large enough to justify the cost of a financial planner, a portfolio tracking platform could be a good option. These are online platforms that work alongside your online share trading platform to track your shares for you.

Advantages of using a share portfolio management platform

Here are the key advantages of using a dedicated portfolio management platform instead of relying on an excel spreadsheet to keep track of your shares:

• Saves you time

A portfolio tracking platform will help you import your trading data automatically from your online share trading account, instead of having to manually enter the data yourself. Plus, it will keep up-to-date with share prices in real time in the one place, without you having to keep an eye on your shares individually.

• Get a complete picture of your portfolio

Your online share trading platform will only track the performance of the shares you’ve bought through that broker. If you’ve bought shares with other brokers or investment apps, or if you also own other assets or are trading different financial products, these won’t be included in your online broker’s platform. An external portfolio management tool can help you pool all your investments into one place so you can see how your portfolio is tracking as a whole.

• Understand the true value of your dividends

Dividends are great when they land in your bank account, but it’s easy to forget about them when you’re looking at how your shares are performing. Some share tracking platforms allow you to include dividend payments and dividend reinvestment plans into your portfolio performance, to give you a better idea of how your shares have performed overall.

• Helps with tax reporting

Share tracking platforms help you meet your tax obligations by creating reports on your dividend income and any capital gains you’ve realised throughout the financial year. These reports can help you spot opportunities to offset any capital gains with any capital losses you’ve made, reducing your tax bill.

• Helps SMSFs meet their tax obligations

Portfolio management platforms are particularly useful for SMSF trustees who have strict investment and tax reporting obligations with the ATO. These platforms can help trustees develop detailed, up-to-date reports on all the investments held by the SMSF as well as all the income generated from these.

• Less room for human error

If you’ve got more than 10 holdings, it’s quite easy to make mistakes if you’re reporting their performance manually in a spreadsheet. An online share portfolio management tool removes the possibility of human error.

• Provides market research and trading ideas

Portfolio management platforms offer a suite of market reports, broker recommendations and detailed stock analysis reports that aren’t often available through your online broker. These platforms also give investors access to an online community of investors from around the world to share trading ideas and reports.

How to get started with a share tracking platform

To get started, you can compare the platforms featured in the table above and go to their sites to create an account online.

If you're just getting started with share trading and aren't looking for a portfolio management platform just yet, check out our guide on how to buy shares instead.