Monitoring and evaluating the performance of your investments are key elements of successful investing. Here are a few steps and tools to help you do just that:
1. Set goals and evaluation criteria
Financial goals: Determine what you want to achieve (e.g., capital growth, passive income).
Performance Criteria: Set criteria for evaluation (e.g., return, risk level, reaching target amounts).
2. Monitor investments regularly
Platforms and apps: Use investment platforms and apps that provide updates on the health of your assets (e.g., investment apps, banking platforms).
Monthly or quarterly reports: Periodically review reports on your investments to track their status.
Analyze performance
Return: Evaluate the total return on your investments, including both capital gains and dividend or interest income.
Compare to Indices: Compare the returns of your investments to relevant market indices or benchmarks to see how well they perform relative to the market.
Risk and Volatility: Assess the risk and volatility of your assets. For example, use measures such as standard deviation and beta coefficient.
Use key performance indicators
Capitalization: Evaluate how the capitalization of your investments is increasing or decreasing.
Net Asset Value (NAV): For funds and ETFs, net asset value can be a useful metric.
Risk/return ratio: Consider metrics such as the Sharpe ratio, which helps you understand how much return you are getting per unit of risk.
Regularly monitoring and evaluating the performance of your investments will help you make informed decisions and adjust your strategy to achieve your financial goals.