Update: New Computer Investing Products
by CI Staff
Economatica Portfolio Optimization
Economatica offers a variety of stock and portfolio analysis tools, some of which are geared toward professional investors. However, their newest offering, Portfolio Optimization, gives individual investors the ability to create portfolios using modern portfolio theory and the efficient frontier. The efficient frontier concept finds “optimal” portfolios based on risk and reward.
The first step is creating a portfolio of stocks. An unlimited number of portfolios can be created with an unlimited number of stocks in each. Next, a target price is chosen for each stock, which is used to create the efficient frontier graph.
You can move the curser along the graph to see various stock weightings based on different risk and reward combinations. You can also use additional inputs like the Sharpe ratio to find a more optimal portfolio. Constraints, such as the minimum and maximum percentages of each stock that must be included in the portfolio, can be graphed alongside the efficient frontier. Constraints allow for shorting, can include the risk-free rate and can be based on sector weightings as well.
Finally, you can enter your actual portfolio and its value to see how it stacks up to the efficient frontier. You can see if you are taking too much risk for too little reward and learn how to adjust your asset allocation to match the “optimal” portfolio according to the efficient frontier. The program also shows stock correlation. All data can be saved for later use and printed. Data is updated automatically with end-of-day data.
Stock Sector Monitor
Stock Sector Monitor lets you keep tabs on 7,000 stocks in any of 200 sectors. Each sector breakdown provides quotes, daily change in price, open price, the high and low price and volume (updated via a refresh button).
There are 31 primary sectors, each broken down into subcategories. For example, the primary automotive sector includes the subcategories of major manufacturers, auto parts, recreational vehicles and trucks and other vehicles. In the My Stocks area, you can create your own watch lists and holdings. This section also contains a full list of companies in the Dow Jones industrial average, NASDAQ and S&P 500 indexes. This allows you to see which individual stocks are affecting these indexes on any given day.
You can highlight a stock and then select one of several toolbar icons—a chart symbol links you to a stock’s MSN Money chart, a light bulb symbol represents stock news, and a book is used for company reports. All of these links direct you to MSN Money. You can also change the source if you wish via the URL properties button, which is represented by a pencil writing on paper.
The program also gives you the option to export your data in ASCII format.
Overall this program provides a platform to research stocks based on sectors, which can be very helpful when attempting to diversify your portfolio.
TDAmeritrade, an on-line discount broker, is offering clients free access to its new trading software, StrategyDesk. StrategyDesk is a trading and analysis tool that helps active traders evaluate a trading strategy by backtesting predefined or customized technical formulas. The program allows you to run multiple strategies on multiple symbols, set up programmed trades, access advanced customizable technical indicators, receive real-time indicator updates, screen stocks based on technical conditions and evaluate the hypothetical past profitability of a strategy, including commissions.
Kiplinger.com now provides free lists of the top 25 mutual funds over one-, three- and five-year periods for 23 stock-fund categories. Stock-fund categories include: 11 diversified stock-fund categories, seven categories of sector funds, hybrids, specialized funds, and three international fund groups. There are also eight bond fund categories. Kiplinger is now updating the fund data twice per month.
Reuters has stopped taking subscriptions for its PowerScreener 3.0 stock screening program. Current users continue to have access, but Reuters is re-evaluating the program. You can still access the free stock screening tool PowerScreener Lite.
Investorguide.com, a site that aims to help individual investors manage their finances and investments, has launched BusinessDictionary.com. The free site offers a glossary of over 20,000 business words and highlights a different term each day. You can browse by subject, word or popular searches. Words used in definitions also include links to related words.
Morningstar Principia provides investors with a variety of investing tools to assist in portfolio management, mutual fund and stock screening and now asset allocation. The new Principia Asset Allocation module suggests the best allocation for portfolios. The analysis takes into account inflation, taxes, ongoing savings and more to create an individualized asset allocation analysis. Principia Asset Allocation also graphs an efficient frontier to suggest an optimal risk/reward profile. Additionally, Monte Carlo simulation is included. For more information, including pricing and a fact sheet, visit the Web site (Principia is found in the Advisors area).
BusinessWeek has launched a Company Insight Center. This new feature pairs BusinessWeek’s editorial content with corporate data from Standard & Poor’s Capital IQ division for investors researching individual companies. The database covers over 42,000 public and 322,000 private companies. Information includes: charts, news, financials, corporate biographies and more. Access is free.