In the face of market volatility, it is more imperative than ever for investors to use the best tools to manage their portfolios, such as monitoring tools through which stock tracking is made easy.
A confluence of macroeconomic issues such as Russia’s invasion of Ukraine, the Fed’s hawkish stance, supply-chain imbalances, and concerns for an impending recession have been on investors’ minds lately. Most stocks have suffered big drops until the recent bounce. The S&P 500 has plunged around 14% so far this year with June seeing a lot of volatility.
Diversification is key
Against such an uncertain backdrop, maintaining a diversified stock portfolio is the best way to hedge risks. Generally, investors look for stocks with strong fundamentals, which are expected to record high growth and profits. But this cannot always be true. Due to various company-specific issues and macro uncertainty, growth and profitability trajectory may not slope up always as expected. Therefore it is imperative to consistently track your portfolio companies’ financial performance.
Keeping an eye on the valuation of stocks is also helpful, which gives investors a chance to capitalize on undervalued stocks to reap benefits in the future. Also, constant observation of your holdings’ peer companies provides insights into the sector or industry trends.
Prudent portfolio management is the key to maximizing risk-adjusted returns over the long run. This requires continuous monitoring of one’s portfolio and intensive research when changes need to be made. But in our busy lives, we tend to miss out on opportunities to optimize portfolio returns.
Hence the need for insightful tools, such as Ziggma’s portfolio visualizer, smart alerts, stock scores or the tracking of your portfolio companies’ key performance indicators.
Here’s a quick into how these tools work and how they can help you track your stocks more effectively when owning a well-diversified stock portfolio.
This popular tool helps investors monitor entry and exit levels for their favorite stocks. These levels can be monitored from several angles: price, relative valuation (price to earnings ratio), and yield.
Apple trades at a PE ratio of 29x. If you own Apple shares you may think that at a certain valuation, say a PE ratio of 35x, the shares start becoming quite expensive warranting a sale to take a profit. Then you would want to wait for them to come back down to a PE ratio of 20x to find them attractive again. For both events, you can set Smart Alerts in Ziggma so that you no longer have to spend time monitoring these levels.
Similarly, you can set alerts for lower and upper-bound values of dividend yield for your dividend stocks.
Smart Alerts will help you manage your entry and exit levels a great deal and save you tons of time.
The Ziggma Stock Score – a product of the application of big data analytics to fundamental analysis, ranks stocks against their peers on a scale of 0-100. As a result, Ziggma users are able to select “best-of-breed” stocks easily based on these scores. Our analysis captures four categories of fundamental analysis – growth, profitability, valuation, and financial health – factoring in dozens of key performance indicators over multiple backward and forward-looking time periods.
In the stock scorecards, you can also find sub-scores for growth, valuation, profitability, and financial situation. This view is extremely valuable for investors looking predominantly for growth stocks or undervalued companies.
In short, the Ziggma Stock Scores benefit Ziggma users by helping them identify “best-of-breed” stocks in a matter of seconds, eliminating hours of research and screening.
Stock KPI tracking on Ziggma is a very powerful feature that tends to be overlooked. The Fundamental view of a portfolio shows the main key performance indicators for your stock holdings, including the margin, ROE, revenue growth, income growth or analyst target.
The true value in the feature comes from the comparison of KPIs’ current levels vs. at purchase. It means that in one single screen you can see whether your portfolio companies are actually doing better than when you first added them to your portfolio. The Ziggma portfolio visualizer helps you achieve the ultimate goal, which is to hold companies that keep getting better over time, and thus create value for their shareholders.
We cannot stress it enough. As an investor, your ultimate objective should be to make sure your portfolio and its holdings keep improving over time. Ziggma gives you the tools to do so in an effective and time-efficient manner – even if you are not a professional investor.