4 ways to be a prepared investor this year

The contribution analysis report makes it easy to see how your different asset classes have performed relative to each other over your chosen period.

2. Track your portfolio against a benchmark

Once you have evaluated your investment strategy and rebalanced your portfolio if necessary, it’s a good time to start tracking your portfolio against a benchmark. By benchmarking your portfolio against an index-tracking ETF, for example, you can track your portfolio against market trends. This allows you to determine whether your portfolio’s performance can be attributed to market conditions or your own investment decisions.

Investors can benchmark their portfolio against any one of the 240,000 stocks, ETFs, funds and unit trusts Sharesight supports. Simply click ‘Add a benchmark’ on your portfolio’s Overview page and select the instrument that best reflects your asset allocation or investing strategy. As can be seen from the screenshot below, Sharesight makes it easy to see where your portfolio diverges from the benchmark. In this case, for example, you may decide to alter your investing strategy or even invest your money in the benchmark ETF rather than continuing to pick stocks.

An example of an investment portfolio that is underperforming and diverging from its chosen benchmark.

3. Review and track your dividends and distributions

If you invest in dividend-paying stocks, it’s important to have a way to keep track of all your dividend and distribution statements. You could keep track of them in a spreadsheet, but the ability to track them automatically makes it much easier to be a prepared investor, especially when tax time rolls around.

With Sharesight, dividends and distributions are automatically tracked in your portfolio, including dividend reinvestment plans (for AU and NZ investors). Once you’ve added all your holdings to Sharesight and set up any DRPs you may have, all you need to do is log in to Sharesight and verify and accept your dividend and distribution payments as they come in.

Another useful feature for dividend investors, Sharesight’s future income report (available on Investor and Expert plans) allows investors to see all of their upcoming announced dividends. This makes it easy for dividend investors to track their monthly dividend income and project their short-term cash flow.

The future income report is designed to help you keep track of upcoming dividends (as shown above), but you can also run it over past periods to give you a consolidated record of all the dividends you have received.

4. Get ready ahead of tax time

For many investors, getting ready for tax time can be somewhat of a nightmare, requiring you to track down a mixture of paper and digital statements, often from more than one share registry. This is known as "shoebox syndrome" and it’s just as inconvenient for accountants as it is for investors, what with all the back-and-forth communications about the various statements and receipts required to file a tax return.

Investors can save time (and potentially money) by keeping track of all their records in Sharesight throughout the year. Trades and dividends are automatically tracked in Sharesight, but investors also have the option to attach files such as trade confirmations and dividend statements to the holdings in their portfolio. This makes it much easier to verify these records at tax time before sharing the information with an accountant.

Sharesight also has a range of convenient reports designed to help investors prepare for tax time:

• Taxable income report: See all dividend, distribution and interest payments received during any selected period.
• Capital gains tax report: Calculate capital gains from a CGT perspective (for Australian and Canadian investors) over any selected period. Available on Starter, Investor and Expert plans.
• Unrealised capital gains tax report: Calculate unrealised capital gains at any date to model tax loss selling scenarios and determine your unrealised CGT liability. Available on Investor and Expert plans.