7 Smart Reasons You're Missing Out by Not Using a Portfolio Tracker

What's the best way to track your investment portfolio? Some people rely on their broker for records, others throw together a simple spreadsheet, and some build incredibly complex ones.

I’ve been through all of those stages myself, and honestly, after using purpose-built tools like Sharesight and Navexa, I could never go back. If you're serious about investing, you might be missing out on some huge benefits.

Here are 7 big reasons why you should be using a dedicated portfolio tracker.

1. Easily Manage Multiple Brokers and Portfolios

Over time, it's natural to try out different brokerage platforms. You might start with a big bank broker, then move to a low-cost option, and add another to take advantage of a sign-up bonus. Without a portfolio tracker, managing multiple accounts can become an administrative nightmare.

Tools like Sharesight and Navexa make it effortless. They consolidate all your data across different brokers, so you can see your entire portfolio in one place.

• Multiple Investment Types: You can add shares, ETFs, managed funds, crypto, and even investment properties.
• Multiple Entities: You can set up separate portfolios for yourself, your spouse, a self-managed super fund (SMSF), a family trust, or even for each of your kids all under a single subscription.
• Share Access: You can grant access to individual portfolios to your family members or your accountant, which is perfect for teaching kids about investing while still keeping an eye on their progress.

2. See the True Performance of Your Investments

Here's something most brokers won't show you: your true return. They typically just compare what you paid to the current market value. This is far from the full picture, especially if you receive cash dividends or hold investments in foreign currencies.

Sharesight and Navexa break your total return into three parts:

• Capital Gain: The profit or loss from share price movements.
• Income Return: The gross income received, including any franking credits.
• Currency Gain: The impact of exchange rate movements on your foreign holdings.

This detailed breakdown gives you a much clearer view of your portfolio's real performance, helping you understand if it's income-focused or growth-oriented and how much currency risk you are exposed to.

3. Keep Your Cost Base Accurate Without the Hassle

If you use strategies like dollar-cost averaging and dividend reinvestment, you are constantly buying the same share or ETF at different prices. Investing monthly into just three ETFs and reinvesting quarterly dividends would create 48 separate parcels in just one year.

Imagine tracking that over decades you'd be dealing with thousands of individual parcels. While these are great strategies, the administration can be a nightmare. When you eventually sell, you need a full cost base history to accurately calculate your capital gains.

Portfolio trackers handle all of this for you automatically, keeping your cost base records organised and accurate without you having to lift a finger.

4. Build a Smarter Capital Gains Strategy

Many investors don't realise they can influence how much capital gains tax they pay. Most people assume they have to sell their earliest shares first (known as the "First-In, First-Out" or FIFO method).

However, the ATO gives you the flexibility to choose which parcel you sell. This is where a portfolio tracker becomes a powerful tax planning tool. Both Navexa and Sharesight allow you to model different sale strategies to see how they impact your tax bill. You can choose to:

• Minimise CGT: The most common choice, especially in a high-income year.
• Maximise Gain: Useful if you're on a low marginal tax rate for a particular year and want to realise gains now.
• FIFO or LIFO: The standard accounting methods.

This allows you to shift your tax liability to the year that is most favourable for you.

5. Avoid the #1 Mistake ETF Investors Make

The single biggest mistake Australian ETF investors make is not adjusting their ETF cost base after receiving their annual AMIT statement (also known as the ETF Tax Statement). If this sounds unfamiliar, it's a legal requirement that can have a big impact on your future capital gains.

Doing this manually can be incredibly painful, especially if you have held an ETF for years. With Sharesight and Navexa, all you need to do is enter the figures from your statement, and the system updates your cost base automatically. Navexa even takes it a step further, allowing you to upload your statement and have it extract the data for you.

6. Make Tax Time Quick and Stress-Free

With a portfolio tracker, tax time becomes a breeze. Once you've confirmed your dividends and entered your AMIT details, there's hardly anything else to do. With just one click, you can generate a comprehensive tax report that matches ATO codes perfectly. Your accountant will thank you for it, and there's a good chance they'll charge you less as well.

7. Stay on Top of Your Future Cash Flow

If you're living off dividends or planning to one day, seeing a clear estimate of the income you'll receive over the next 12 months is incredibly valuable. Both Navexa and Sharesight offer future income reports, showing you a clear chart of confirmed and estimated payments. Without a tool like this, you'd be stuck building and constantly updating a sophisticated spreadsheet yourself.