Which tool are you using to track your investment portfolio, in real-time and free?

Actually, there are quite a few web tools that let you create and track your investments for free. For example, you can create a portfolio tracker using Yahoo or Google Finance and from there, you can either manually enter transactions yourself or import data to the portfolio and get updates such as market value, gains, and return in real time. Or if you own software tools like Quicken (now Mint for its online version), then you have a very nice tool that allows you to see all the statistics of your investments, not limited to each individual stock or mutual fund you own, but the overall performance of the portfolio as a whole.

While these tools are quite helpful, they also have shortcomings from my experience. For instance, with Google Finance, I need to use the website if I want to check a particular transaction. On my phone, I can only see symbols, current prices, and changes, no more. Google Finance Portfolio can show today’s total of my portfolio. But if I want to see how much I had yesterday or a month ago, then I am out of luck unless I had checked the market value on that particular day and recorded the number somewhere. For Quicken, I don’t how to worry about recording the number myself, but all of its powerful functions are tied to that piece of software that is running on my home computer. Away from that computer, I have no access to the data at all. Of course, I could also log into each brokerage account and check how my stocks are doing, either through the broker’s website or mobile app such as the one from Scottrade, but that will require a fair amount of work since my investments are with multiple brokers. So it would be nice to have a central place to host all the data and, at the same time, also gives me real-time updates while allowing me access anywhere for free.

If you know such a place or tool, please let me know. But for now, I am just going to use my own real-time stock portfolio tracker that I created a while ago, but updated recently, using Google Doc (now Google Drive). The tool is rather simple, but it gives me all the basic functions I have asked for so far.

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I created the original spreadsheet a few years ago, but didn’t use it that much because at that time, the only way to use it was through Google website. Not very convenient. And it didn’t do much other than  tracking price changes in real-time. Now since I have the ability to access the spreadsheet on my phone, I am using it more and more, so I made some changes to make it more useful.

Right now there are four sheets with different information. The first one is called Portfolio Tracker. That’s the place where I keep all transactions, both buy and sell, that include real-time updates of three major indices (the Dow, S&P 500, and NASDAQ), as well as all stocks I own. It will show me current prices and changes, and Daily Change, Market Value, and gain or loss of each transaction and overall return in both dollar amount and percentage. Updates are automatic after a transaction is entered with the right information about symbol, buy, or sell, date, price and shares.

The second sheet is what I called Historical Price, where I display historical prices of all the stocks I own from the time of purchase, or any give day in the past. With the historical prices, I can draw charts of each stock with different time scale. I am thinking of using the historical data to update past daily value for the next sheet, but wasn’t successful. Updates on this sheet are also automatic.

The next sheet, Daily Total Tracker, is probably the most helpful one of this tool because it allows me to track daily market total of the portfolio. As I mentioned above, free tools such as Google Finance shows me the portfolio total of the current day, but if I want to see how much I had a week ago, then I have to use something else, like Quicken, which keeps a record of the history. With the Daily Total Tracker, I can calculate the total market value of any day in the past and record the numbers in the table. Using the portfolio total history, I can then plot the change of my investments over time.

The last sheet is actually a helper sheet that I use to calculate the past portfolio value. It’s basically a duplicate of the Portfolio Tracker sheet, but with less info. I am still thinking of ways to use Google Finance for the calculation. But given how the data is returned from Google Finance, the options are quite limited.

So, with this free tool, what I get are:

• One place for all my investments
• Real-time updates
• Track of historical data
• Web and mobile access

If you are interested in trying this spreadsheet or using it as a template to create your own tracking tool, click here to request access. I plan to keep working on it to make it better. After using it, if you have any suggest to improve the tool, please do let me know.

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When I opened my TradeKing account in 2007,  I also got a book, The Options Playbook, from TradeKing after I expressed interest in options trading. I have bought and sold stocks for several years, but never traded options because I feel that trading options requires a little more skills than buying and selling stocks. Before I understand exactly how to trade options, I am not going to jump just because, from what I heard, options trading is a faster way to make money (or lose money for that matter).

I got the book for quite some time already, but didn’t get the chance to read it until recently. Actually, it isn’t really a book that you can buy from a book store, but more like notes with basics of options trading that are easy to understand. It starts with explanations of what an option and volatility is and some common terminologies used in trading options (such as Long, Short, Put, Call, and Strike Price, etc.).

After the basic concepts, there are a few pages in the book, called Rookie’s Corner, for beginners like me. This part of the book mainly covers two topics (or plays) for traders who just start to trade options and don’t want to get burned:

• Writing covered calls
• Buying LEAPS calls as a stock substitute

The discussions in Rookie’s Corner cover the definition of each of the techniques and scenarios when and how to use them.
What I like the most about the book is The Plays part that consists of a total of 30 plays. Each play tells investors the setup of the play, who should run it and when to run it, and the strategy for the play. In addition, each play also comes with a diagram that shows the market condition to use the play.

I am still reading and digesting the plays and have yet to use any technique to trade option, but so far I found that the book is quite helpful in understanding some commonly used strategies in options trading. And because of the concise, getting-right-to-the-point language used in describing each play, reading the playbook is much easier than reading a traditional book.

I got the playbook when I opened my TradeKing account a couple of years ago. Right now, the book may not be available in hardcopy. However, if you are interested in using the playbook as the starting point to learn to trade options, you can still read the book online after you open a TradeKing account (be sure to check out TradeKing review to learn more about the broker before opening an account). In addition, TradeKing also offer two free intelligence reports on options trading:

• Options Trading Basics
• Top Ten Mistakes in Options Trading

To receive these free reports, all you need to do is provide your email address and the reports will be sent right to your inbox. And besides the free reports, you will also get $50 bonus if you use the link in the email to open a TradeKing account with $2,500 or more and make a trade. Pretty sweet, right?

Given how volatile the stock market has been lately, maybe it is time to finally learn how to use options trading to profit

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It was October 2008 when I last updated this list.  Back then, we were at the peak of the financial crisis after the collapse of investment bank Lehman Brothers on September 16, 2008. In October 2008, stocks went up and down like crazy and three of the ten largest single day drops of the Dow Jones Industrial Average occurred in that month.

Today, nearly three years later and long after the recession has been officially declared over, we got a big surprise from the market,  a 512.76-point drop of the Dow, the largest since December 1, 2008 when the benchmark lost 679.95 points. There was no a single reason that caused the big sell-off today, which whipped out the remaining gains of the Dow for the year. Rather, it was a combination of fears of new recession, debt worries from Europe and potentially another disastrous employment report out tomorrow that made investors head to the exit. In the past two weeks, the Dow has lost more than 1,300 points, or more than 10%, putting the index in the correction territory.  For the record, today’s 512.76 points decline, or 4.31%, of the Dow earned it the 9th place in the largest single day losses list.

Update: On September 29, 2008, the Dow lost 777.68 points as the House rejected the proposed bailout plan, the largest point drop ever.

Photo credit: mymbg1

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Do you trade stocks? If you do, have you ever wondered what happened after you clicked the button and submitted your trading order?

In the early days, if you were to buy shares of a stock, you would have to call a stock broker who may hold a seat on NYSE floor and the broker would then get a quote of the stock from a market maker before placing the order, buy or sell, on your behalf.  Today, with electronic systems replaces manual operations, things are quite different and simple. Anyone who has a brokerage account with any of the discount brokers can place a trade. All he or she needs to do is log into the account, enter the symbol of the stock he or she wants to trade and the number of shares, set price limit (or without any specification in a market order) and place the trade. For a market order, you will receive a confirmation after the order is executed, which takes only seconds after the order is submitted, and the trading process is completed. But do you know where your order went and how it was executed after hitting that Submit button?

Last week, I came across an early article on CNBC about how stock orders places by individual investors through a discount broker got executed. Basically, stock trading nowadays is all about technology, liquidity and complexity as the article pointed out. For those using discount brokers to trade stocks, the article uses Scottrade (see Scottrade review for more details about the broker) as an example to show how it is done. According to the article, when an order is placed at Scottrade to trade a stock, it uses more than one market maker, including Knight Capital, UBS, Citadel and Citigroup, to find the best quote for the order. When multiple quotes from these market makers, whose job is to match the buyers and sellers of the same security, are received at Scottrade, it will use a set of criteria to determine where the order should be sent to. The criteria used in the routing decision include price, speed of execution and quality of service.

For market makers, if they can’t fulfill the order with their internal inventory, i.e., match the buy order with a sell order that has already been executed, they will turn to other resources to get the shares needed for the other. If there’s a price difference between the buy and sell order, the market maker will profit from the trade and a portion of the profit will be sent back to Scottrade as a rebate for sending the order their way. Usually, the rebates are “typically a tenth of a cent per share”, according to the article. Of course, since I am a customer, I don’t want the amount of rebates affects Scottrade when it chooses which market maker to send my orders. I am glad that they said that’s not a one of the criteria.

BTW, if you are new to stock trading, here’s a short video from TradeKing, another popular discount broker, explaining how to place an order with TradeKing. Even though the video is made by TradeKing and is specific for TradeKing customers, the process is quite similar to any other discount brokers.

You can find out more about TradeKing from an early discussion on how to open an account, how much it costs to trade, and trading tools it offers.

Photo credit: Claudia R M Maia

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The numbers at the pump never seem to stop going up lately.

After bottoming out at around a national average of $1.62 per gallon back around Christmas of 2008 thanks to the implosion in the financial sector, gas prices have resumed their slow steady northward march and are currently back above $4.00.  Plus, we’re coming into the summer travel season where seasonal travel and demand for gasoline tend to increase so don’t expect a reprieve from $4 a gallon gas any time soon.

That doesn’t mean that there may not be something you can do to help ease the burden a bit though.

Prices at the pump are a direct reflection of current crude oil prices.  If you want to hedge your exposure to a rise in gas prices, why not own the underlying asset that causes gas prices to rise?  No, I’m not talking about storing up a thousand barrels of crude oil in your basement.  I’m talking about adding some oil stocks to your portfolio.

Now, the price of oil stocks will not move in direct correlation with oil prices (there are many other factors that go into a stock’s price) but adding exposure to oil stocks will be a lot easier, less costly and less risky than delving into the highly volatile world of oil futures contracts.

There’s no denying the fact that oil companies profit big time from rises in oil prices.  ExxonMobil – the biggest oil company out there as well as the biggest company out there period with a market cap of around $400 billion – earned around $35 billion in the last 12 months.  While all that cash doesn’t necessarily mean a straight line up for the stock price there has been shown to be some high level correlation between the stock’s price and the price of oil.  If gas prices go up, wouldn’t it be nice to own an investment that has a good chance of appreciating in value at the same time?

But what’s the proper way to make a play?  You have a few different choices depending on how easy you want it to be and how risky you’re willing to be.

ETF

If you want a low cost, broadly diversified investment option, an oil ETF should be your first choice (see how to buy ETFs and trade ETFs for free for more discussions on how to invest in ETFs).  These will invest in a wide array of oil producers, manufacturers and explorers and will do so at a cost that won’t dent your pocketbook.  The SPDR S&P Oil & Gas Exploration & Production ETF might be one you’d want to consider if you choose to go this route.

Stocks

You can go for individual stocks too.  These carry some higher risks because you’re investing in single securities but the benefits can be the same.  ExxonMobil is the alpha dog in this sector (you can buy ExxonMobil (XOM) through ComputerShares without commission).  BP was another large company here but the Gulf oil spill put its future in question.  Others to consider would be stocks like Chevron and Sunoco.

Futures

Buying oil futures is not for the faint of heart.  Yes, it’s more of a pure play against oil prices but not knowing what you’re doing can lose you a lot of money in a very short period of time.  This may be an option best left to the experts.

Try out the oil stock hedge and you may find yourself sweating the price of gas a little less this summer.

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