Dear Carrie: What's a good way to see if I'm making good investment choices? With several retirement accounts plus a brokerage account, it's hard to keep track of my financial "big picture" in terms of performance and risk. Any ways to make this easier?
I'm surprised that I don't get asked about this topic more often.
The fact is that most people today don't have "a" portfolio -- they've got a bunch of them: A 401(k) at work. A Rollover IRA from a previous job. A brokerage account. Maybe the odd mutual fund account. And that segmentation can make it a challenge to get a single, all-encompassing view of your investing life. So, thanks for a great question!
Before I outline some of your many options, let me add something important: The proverbial "big picture," as you put it, is not enough. To help you make really good investing decisions, you need to see the forest and the trees. You need both a comprehensive, macro perspective on your portfolio as well as a micro view of what your positions actually include in terms of exposure. That's the best way to thoroughly understand your asset allocation, which I believe is the key to tracking relative performance and making decisions.
YOU CAN CONSOLIDATE
Start by getting your accounts in a single place. It's easier than ever to consolidate your investments into one brokerage firm through a "transfer of assets" (or TOA in industry parlance). If you own a mutual fund purchased directly from the fund provider, you can probably (but not always) transfer it into a brokerage account. If you have a couple of Rollover IRAs, you can likely consolidate them into a single account.
Check with your broker-dealer to see what's possible. It's generally best to try to transfer assets "in kind" -- literally moving positions into your consolidated account -- instead of liquidating them and moving the cash, which could generate tax consequences and transaction costs.
YOU CAN AGGREGATE
Some broker-dealers also allow you to aggregate outside investment information into your account without transferring the assets. Typically, this requires entrusting your external log-in and password credentials to your primary broker-dealer. Some third-party websites allow you to view multiple accounts at once, which gives you a macro view of your investments. You create a password-protected account, provide log-in credentials for all your financial services providers (including bank accounts, credit cards, etc., if you like), and see your entire financial life in one convenient place.