Creating A Spreadsheet To Track Your Investments Efficiently

Keeping track of your investments can be a challenge, especially if you have a lot of different accounts and investments. An investment tracking spreadsheet is a simple and versatile way to monitor your investments and understand their overall performance. It allows you to see where your money is going and how it is growing, giving you a clear picture of your financial health.

With a spreadsheet, you can input your portfolio information, such as the account name, stock ticker symbol, investment name, and category. You can also track the number of shares, purchase price, market value, and gain/loss for each investment. This makes it easy to calculate future performance, risk, profit, and loss, and compare different types of investments.

Additionally, you can use formulas to determine the break-even point for your investments and evaluate your asset allocation against your investment strategy. By connecting your spreadsheet to real-time stock tracking information, you can always see the current value of your investments and make informed decisions.

Whether you use Microsoft Excel, Google Sheets, or another platform, creating an investment tracking spreadsheet is a powerful tool for any investor to stay on top of their portfolio and make informed decisions.

Utilise Microsoft Excel or Google Sheets to create a spreadsheet

Microsoft Excel and Google Sheets are both excellent tools for creating a spreadsheet to track your investments. They are versatile and powerful, allowing you to monitor your investments across various categories, types, and futures.

Setting up the Spreadsheet

• Create a new spreadsheet: Open Microsoft Excel or Google Sheets and start a new spreadsheet. Name it appropriately, such as "Investment Tracker" or something similar.
• Input basic investment information: Start by entering the fundamental details of your investments. This includes the account name, stock ticker symbol, name of the investment, and the category it falls under (e.g., stocks, mutual funds, ETFs, etc.).
• Shares owned: Add a column to indicate the number of shares you own for each investment. This is crucial for understanding your holdings and making decisions about buying more or selling.
• Price and value information: Include columns for price and value data. You can use functions like `=GOOGLEFINANCE("symbol","attribute")` in Google Sheets to pull real-time data. In Excel, you can connect to real-time stock information by typing the ticker symbol, selecting Data > Stocks, and converting cells to the stocks data type.
• Calculate the break-even point: Determine the break-even point for each investment, which is the price at which you will ensure a net income of zero. Use the formula `= (((Buying Price*Shares Purchased+(Commission*2))/Shares Purchased)-Tax Rate*Buying Price)/(1-Tax Rate)` to calculate this.

Additional Features and Tips

• Visualize your data: Utilize charts and graphs to visualize the performance of your investments over time. Both Excel and Google Sheets offer charting tools that can help you create visual representations of your data.
• Track asset allocation: Your spreadsheet can help you evaluate your asset allocation and ensure it aligns with your investment strategy. Categorize your investments and calculate the percentage of your portfolio that each holding represents.
• Monitor risk and performance: Your investment spreadsheet should also help you gauge the overall performance of your investments and manage risk. Compare your portfolio's performance against benchmarks to identify areas that may need adjustment.
• Keep it updated: Regularly update your spreadsheet with the latest information to ensure its accuracy. If you're using Google Sheets, you can enable real-time price updates by connecting the spreadsheet to your Wisesheets account.
• Customize for your needs: Depending on your specific investments and goals, you may need to customize your spreadsheet. For example, if you invest in bonds, you'll need to calculate the bond's value at maturity manually or through a separate calculator, as the `=GOOGLEFINANCE` function doesn't support bond data.

By following these steps and tips, you can create a comprehensive investment-tracking spreadsheet using Microsoft Excel or Google Sheets. This will help you stay organized, make informed decisions, and track the performance of your investments over time.

Include investment information, number of shares, price and value

When creating a spreadsheet to track your investments, it is important to include investment information, the number of shares, price and value. This is essential for keeping track of your holdings and will allow you to visualise the performance of your stocks at a glance.

In the first four columns of your investment tracker, you should include the following investment information: the account name, stock ticker symbol, name of the investment, and the category it falls into. This will allow you to cross-reference your investments against online investment trackers.

Next, you will need to input the number of shares you own for each investment. This is vital for keeping track of your holdings and making informed decisions about buying or selling.

You can then use a function like GOOGLEFINANCE or connect your spreadsheet to real-time stock tracking information to automatically pull in the current price of each security. By multiplying the price of the security by the number of shares you own, you can calculate the total value of your holdings.

Having all this information in one place will enable you to easily evaluate the performance of your investments and make more informed decisions about buying, holding, or selling. Additionally, you can use charts and graphs to visualise the data and spot patterns in your investments' performance over time.

Calculate future performance, risk, profit and loss

When it comes to calculating future performance, risk, profit and loss, there are several methods and metrics to consider.

Firstly, focus on individual assets to understand your portfolio's overall performance. One basic measure is to calculate each asset's return on investment (ROI), which shows how effectively your money is being utilised. To calculate ROI, you need the original cost of each investment and its current value. By subtracting the original cost from the current value and dividing that number by the original cost, you can determine the return percentage.

For example, if an asset's current value is $1,500 and the original cost was $1,005, the calculation would be as follows:

> ($1,500 - $1,005) / $1,005 = 0.49 or 49%

This calculation helps identify profitable and underperforming investments.

To calculate returns for an entire portfolio, you can follow these steps:

• Gather Information: List each type of asset in your spreadsheet, including the calculated ROI, dividends, cash flows, management fees, and other relevant data.
• Calculate Individual Returns: For each investment, subtract the original cost from the current value, add any dividends or interest, subtract any fees, and divide this number by the original investment to get the return percentage.
• Determine Portfolio Weights: Calculate the total portfolio value by summing up the current value of all investments. Then, determine the weight of each investment by dividing its current value by the total portfolio value.
• Calculate Weighted Returns: Multiply each investment's return by its portfolio weight, and sum these weighted returns to get the total portfolio return.

For instance, if an investment returned 54% and represents 20% of your portfolio, its weighted return is:

> 0.54 x 0.20 = 0.108 or 10.8%

Additionally, you can utilise time-weighted returns (TWR) and money-weighted returns (MWR) to assess your portfolio's performance. TWR focuses on the portfolio's investment performance by removing the impact of deposits and withdrawals, providing a clearer view of how well your investment choices performed. On the other hand, MWR accounts for the timing and size of contributions and withdrawals, answering the question, "How did my specific investment timing decisions affect my returns?"

To calculate profit or loss, you can use the following formula:

> Net Gain or Net Loss = [ (Current Price - Original Purchase Price) ÷ Original Purchase Price ] x 100

By inputting the current price and original purchase price of an investment, you can determine the percentage change, which indicates the profit or loss.

For example, if you bought a share at $10 and sold it at $17, the calculation would be:

> ($17 - $10) / $10 = 0.7

Multiplying by 100 gives a 70% return.

It's important to consider various types of risks when assessing future performance. Systemic or market risk affects the entire market, influenced by factors like stock prices, interest rates, and economic events like the pandemic. There's also specific or diversifiable risk, which impacts only a specific company due to factors like poor business results or a new competitor. Liquidity risk refers to a company needing to sell assets below market value or having difficulty meeting short-term obligations. Credit or counterparty risk involves the counterparty's ability to assume obligations after borrowing money. Interest rate risk is the potential impact of changing interest rates on different types of assets. Lastly, inflation risk is the possibility of inflation affecting a company's purchasing power or return on investment.

By understanding these risks and utilising tools like volatility indicators, profitability indicators, and value-at-risk (VaR) measurements, you can make more informed decisions about your investment strategy and future performance expectations.

Compare different types of investments

When comparing different types of investments, it's important to understand the various options available and their unique characteristics. Here's a detailed overview of some common investment types:

Stocks: When you buy a company's stock, you become a fractional owner of that business. Shareholders can participate in the company's growth through stock price appreciation and receive regular dividends from the profits. Stocks are typically considered riskier investments but offer higher potential returns.

Bonds: Bonds are debt instruments issued by governments, municipalities, or corporations. When you purchase a bond, you essentially lend money to the entity and become a creditor. In return, you receive periodic interest payments, and the bond's face value is repaid when it matures. Bonds are often viewed as less risky than stocks but usually offer lower returns.

Mutual Funds and Exchange-Traded Funds (ETFs): These are pooled investment vehicles that allow investors to diversify their portfolios by investing in a basket of stocks, bonds, or other assets. Mutual funds are not traded on exchanges and are valued at the end of the trading day, while ETFs are traded on stock exchanges and are valued throughout the day. Both types can either passively track an index or be actively managed by fund managers.

Real Estate Investment Trusts (REITs): REITs are a popular type of pooled investment trust that focuses on commercial or residential real estate. They invest in income-generating properties and distribute regular payments to investors from the rental income they receive. REITs offer the advantage of liquidity as they are traded on stock exchanges.

Alternative Investments: This category includes hedge funds and private equity. Hedge funds employ strategies to limit investment risks by taking long and short positions in various assets. Private equity provides a way for companies to raise capital without going public, and it was traditionally only available to accredited investors. However, alternative investments have become more accessible to retail investors in recent years.

Options and Derivatives: Derivatives derive their value from underlying assets, such as stocks or indices. Options contracts give the buyer the right to buy or sell a security at a specific price within a defined period. Derivatives often involve leverage, making them high-risk but potentially high-reward investments.

Commodities: Commodities encompass a range of tangible assets, including metals, oil, grain, animal products, financial instruments, and currencies. They can be traded through commodity futures or ETFs. Commodities are often used for hedging risks or speculative purposes.

When comparing these investment types, it's essential to consider factors such as risk tolerance, investment horizon, diversification, and expected returns. Each investment type carries a different level of risk and potential reward, so it's crucial to understand your financial goals and risk appetite before making investment decisions.

Visualise data with charts and graphs

Visualising data with charts and graphs is a crucial step in understanding your investment portfolio. It allows you to identify trends, outliers, and patterns in your data, and gain insights that might not be immediately obvious.

Excel and Google Sheets offer a wide range of charts and customisation options to help you visualise your data. Here are some of the most common types of charts and graphs, and how to use them:

• Bar and column charts: These charts are essential for financial analysis. They help to visually present data for comparison. Bar charts use horizontal bars, while column charts use vertical bars. To create a bar chart in Excel, select the data range, click the "Insert" tab, then click on the columns icon dropdown. Under the “2-D Bar” category, choose “Clustered Bar”. To create a column chart, follow the same steps but choose “Clustered Column” under the “2-D Column” category.
• Line charts: Line charts are useful for spotting long-term trends. They connect data points with straight lines, which is great for tracking revenue, expenses, and profit margins over time. You can also use different lines on the same chart to compare multiple datasets.
• Pie charts: Pie charts show proportions of a whole, and are useful when you need to show how different categories contribute to a total. For example, you can use a pie chart to illustrate the distribution of expenses across departments.
• Combo charts: Combo charts allow you to combine different types of charts (bar, column, line, pie) into one cohesive visual representation. This is ideal for financial analysis when you need to compare multiple data points simultaneously.
• Waterfall charts: Also known as bridge charts, these charts help to visualise the cumulative effect of positive or negative values over time. They are useful for understanding how individual items contribute to a total, such as profit margins or cost breakdowns.
• Funnel charts: Funnel charts are great for visualising stages in a process, like sales pipelines or customer acquisition. They show the progressive reduction of data at each stage, helping you identify bottlenecks and areas for improvement.
• Histogram charts: This type of chart displays the distribution of numerical data by dividing it into bins or intervals. It is useful for understanding frequency distributions and identifying underlying patterns in your financial data.
• Box and whisker charts: Box and whisker charts provide a visual summary of data sets, highlighting their distribution and spread. They are useful for identifying outliers and understanding the dispersion and skewness of your data, which is beneficial for risk assessment.
• Treemap charts: Treemap charts use nested rectangles to show hierarchical data as a proportion of a whole. They are ideal for displaying large amounts of hierarchical information, such as organisational structures or portfolio allocations.
• Sunburst charts: Sunburst charts are another way to visualise hierarchical data, using concentric circles to represent each level. This is effective for displaying multilevel financial metrics, such as revenue distribution.

When creating charts and graphs, remember that you can customise and format them to better meet your needs. You can add or remove elements such as titles, legends, data labels, gridlines, and axes. You can also change the overall look and feel of your chart by applying different styles and colour schemes.

Frequently asked questions