Organizing Investment Records For Successful Investing


For many investors, an investment record keeping system consists of shoe boxes in a closet, unopened envelopes in a kitchen drawer, or other similar disorganized collection of investment statements. For such investors, these investment record keeping systems provide little, if any, educational benefit for managing your portfolio.


However, investors that do recognize the importance organizing and tracking their investment activity are rewarded with proven benefits. Additionally, it will improve their long term investing results. Some of these benefits include:


Knowing where you are, to get where you want to go.

Just as you need a map when driving to new destinations, you also need an understanding of your current investments. And additionally, what changes might be required to reach you long term goals. Often times, investors simply purchase securities based on news headlines, neighbor suggestions, cocktail party tips, or other less informed means. By adopting an organized record keeping system, you’ll have the starting point for your journey, with the ‘map’ in place to reach long term goals. Are you properly organized so you’re able to find your starting point, and map out the directions you need to reach your investment goals?

Reinforcing guidelines for successful long-term investing.

Adopting an organized portfolio management and record keeping system allows investors to implement proven principles for success. By investing a set amount regularly, and reinvesting earnings and dividends, you’ll benefit from strategies of dollar cost averaging and compounding growth. An organized record keeping system enables investors to track these regular investments without the paper work headaches. Another guiding principal is to invest in fairly valued growth stocks and mutual funds.

Without an organized record keeping tool, you’ll be less equipped to measure the performance of your investments. You will also be less able to identify those investments that are poorly performing. Without an organized method to track your investments, you will monitor less diversification in balance with your risk tolerance. Like a properly balanced meal, a properly diversified portfolio provides a solid foundation for investors. The organized investor is able to identify how their portfolio is currently diversified, and then able to improve the ‘management’ of their portfolio. This helps when deciding which securities to sell or to purchase to maintain proper diversification.

Simplifying complicated transaction accounting.

Corporate reorganizations are an increasingly common transaction as businesses try to maximize shareholder wealth. By merging with a compatible business partner, or attempting to unlock a business unit’s hidden value through a corporate spin-off, corporations utilize reorganizations to focus on long-term potential. As a result, shareholders are faced with the complicated accounting for these transactions as part of their day-to-day portfolio management process. If you’ve ever needed to manually apply a spin-off, you know how time consuming this transaction activity can be. The process is even more daunting if you own multiple lots of the issuing company. This is because each individual lot needs an adjustment. Investment brokers make errors in properly assigning basis allocations, especially when dealing with older cost basis acquisition lots.  By adopting an organized record keeping system, you’ll have the necessary tools to avoid what is potentially an accounting nightmare.

Managing multiple portfolios.

Adopting an organized record keeping system enables investors to easily review aggregate holdings when owning multiple accounts. For example, many investors have a taxable stock portfolio in addition to a non-taxable retirement account (401k, IRA, etc.). Sound familiar for yourself? And if so, are the mutual funds in your retirement account properly balanced with your individual stock holdings when considering sector, size and objective? Investors need to understand how all of their portfolios are interrelated in order to identify rebalancing needs for better long term results (Unified Account Management).

Leads to greater self-reliance.

In summary, having an organized record keeping system enables the investor to better manage their investments. The more informed you are as an investor, the more successful you will be. Organized investment record keeping provides many tools that focus on vital aspects of portfolio management, leading to better investment success.

Investment Account Manager 3 Individual (since 1985) is a Windows desktop-based software program that provides investors with the comprehensive features necessary to properly organize and manage investment records for long-term investing success.

A free 60 day demo version (no credit card required) is available on our website: Investment Account Manager