In investing, a portfolio is a collection of different assets a single investor owns at any given time. Portfolios grow and change as investors buy and trade stocks, bonds, mutual funds, and other instruments. Traditionally, portfolios were kept in hard copy files and book records. Most investment files are stored electronically now, and many are accessible to investors online. The term “online investment portfolio” is most commonly used to describe an investor’s portfolio as it can be seen and managed over the Internet.
Most of the time, stocks and other investment assets are purchased through investment brokers. One of the ways brokers distinguish themselves and attract business is thorough the range of client-side services they offer. Increasingly, the opportunity to manage an online investment portfolio is a feature that brokerages promote. An online investment portfolio in this context works much like an online banking program. Clients are assigned a user name and choose a password that enables them access to their online investment site, usually in the form of a personal account homepage.
The homepage often shows details of all of the investor’s holdings, including up-to-the-minute rises or drops in account value. Monitoring assets online can provide much more timely information than one could procure waiting for a mailed account statement. Web-based accounts also usually have a place for investors to rearrange their investments — buy and sell stocks, for instance, or shift funds from money market accounts into other instruments, like retirement plans — with little more than the click of a mouse. Most of the time, the password and user name requirements at the front end of the online investment portfolio log-on process are deemed sufficient authentication to allow users to manipulate and change assets without speaking to any brokerage representatives.
Online investment portfolio management can be a real boon for busy investors who want to stay on top of trends and make investment changes that will keep up with the fast pace of most market shifts. Accounts can often be accessed online not just through computers, but also through web-enabled mobile phones and tablets. Investing for many has become a truly mobile endeavor.
With this mobility comes risk, however. As convenient as online investment management may be, the chances that an account could be compromised online are usually far greater than the chances of similar compromise in the hard-copy world. The risk of mistake and hasty decision making can also be a downside to online investing, depending on the investor. Most account managers take great precautions to ensure account fidelity, and to warn investors when they are about to make changes to their investments or account settings. Some countries, including the United States, have rules governing how brokerages must approach online investment portfolio services.
No investing portfolio strategy is completely foolproof. Nevertheless, using the Internet to manage and execute investments is a trend that does not seem to be disappearing. An online investment portfolio can be a good way for an investor to remain actively involved in managing assets, but online investing must be entered into with an understanding of the risks and possible pitfalls.