Many traders choose to invest in more than one field: they may sink funds into markets as diverse as stocks and shares, forex, CFDs, options, and even futures.
This can make keeping track of where your money has gone and how your investments are performing an incredibly complex and time-consuming task, and this is enough to deter many novice traders from diversifying their portfolio beyond one or two areas.
This is a big mistake to make. Diversification is so important to the creation of a stable and balanced portfolio, and is one of the best ways to reduce the many risks associated with investing.
This means that boycotting it is a very dangerous game to play. Instead, you need to find ways of streamlining the process of diversification in order to save on time, minimise your risks, and create a portfolio that keeps on turning a profit.
Tip One: Choose a Multiple Markets Trading Platform
Although many brokers specialise in one particular area of investment, there are those out there, such as Sucden Financial, that offer a broad range of market options.
These firms understand the needs of those who want to sink their money into multiple enterprises, and as a result many have developed trading platforms that allow you to make and track all of your trades from a single place.
This is a fantastic way to streamline the process, keep on top of your trades, and gain a comprehensive picture of not just how individual investments are performing, but also your portfolio as a whole.
Tip Two: Track Your Investments Online
For those who prefer to use a number of specialist brokers across a range of fields, there are also options available to help collate the various data and information from multiple platforms, and streamline them into one place.
Personal Capital, Mint.com and Morningstar.com all perform functions like this. Most of them work by creating charts and graphs to help map out your income, spending, and portfolio holdings, so that you can gain a comprehensive overview of the successes of your various endeavours.
Tip Three: Create DIY Spreadsheets
For those who prefer a greater degree of control over the information that’s displayed, the aesthetics, and the exact setup of documents containing data on investments, it can be a good idea to turn to spreadsheets to help you out.
Custom spreadsheets are a brilliant way to ensure that your needs are met to a letter, and Microsoft Excel and Google Spreadsheets are usually the best places to create them.
Microsoft Excel, in particular, is very useful, thanks to a handy feature that allows it to import live stock quotes, although Google Spreadsheets can also be designed to automatically update with information from various sources.
How will you choose to track your investment?