How to Conduct a Portfolio Analysis

by Eric Rosenberg ; Updated July 27, 2017

Items you will need

  • Internet connection
  • Most recent brokerage statement
  • Calculator (optional)

If you have an investment portfolio, it is important to know if your diversification matches your goals. To find your diversification level, you will need to conduct a portfolio analysis. Doing a portfolio analysis will allow you to find where your assets lie, be they large cap equities, international equities, fixed income assets and so on. Portfolio analysis is an important tool for novice and experienced investors to track their financial situations.

Step 1

Open your most recent brokerage statement. If you have multiple brokerage accounts, you will need to gather information from each brokerage firm, so have every statement available.

Step 2

On a spreadsheet or piece of paper, list your holdings by asset class. Many statements include a listing of asset classes. If you need help determining an asset class, visit a site such as Morningstar or Yahoo! Finance. The most common asset classes are U.S. large cap equities, U.S. small cap equities, international equities, fixed income (bonds) and cash.

Step 3

Add up your holdings by dollar value in each asset class. Use the current market value, not the purchase price, to determine the total. Once you have each asset class total, add everything up to find your portfolio's total value.

Step 4

Using the data calculated in Step 3, calculate the percentage of your portfolio each asset class represents. For example, if $1,000 of your $4,000 portfolio is invested in international stock, that is 25 percent of your portfolio.

Step 5

Optionally, graph your portfolio analysis. Spreadsheet tools like Microsoft Excel can draw a graph for you to see how your investments break down.

Tips

  • Using a spreadsheet program to conduct the analysis can make the calculations easier.

Warnings

  • Be sure to check your math for accuracy and use a recent statement to ensure your analysis is correct. Many brokerage firms will conduct a portfolio analysis for you for free on their websites or include it in your statement. Those are easier and often more accurate than a manual analysis.

About the Author

Eric Rosenberg is a financial professional from Denver. He has an Master of Business Administration in finance from the University of Denver and a bachelor's degree in finance from the University of Colorado, Boulder. Rosenberg has been writing online since 2006 at several blogs including Narrow Bridge Finance.

Photo Credits

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