Portfolio123 is a web-based stock investment service that provides everything from model portfolios to stock screening and strategy backtesting. Investors can create and test their own strategies and ranking methods, use those provided by the service, and analyze a wealth of in-depth and downloadable data. Although general membership is free, most of the website’s services are only accessible with a premium membership, which is quite expensive for an individual investor, but potentially worth the price.
When searching through the massive stock universe for potential investments, screening tools are of tremendous value, but they are difficult to perfect. In addition to the fact that an investor’s method may simply not work, screens are often too stringent with their criteria. In other words, just because an investor can get results down to 10 passing companies does not mean they are all winners.
For this reason, Portfolio123 not only provides a stock screener, but it also allows users to backtest their screening criteria. For those who would rather not create their own screens, the website also provides a variety of predefined screens, which have all been backtested and are fully customizable. There are All-Star screens, which follow criteria indicated by well-known investors such as Buffett and Piotroski, style-specific screens, which are geared to an investing method such as growth or sentiment, technical screens, which attempt to time investments, and many more.
Although backtesting can give screens some merit, it does not necessarily predict future performance, which is why some investors keep their screens and backtesting loose. That is, they do not gear their screens to display a limited number of stocks and then tweak the screens until they provide the best backtesting results. Although the alternative method means there are more stocks to analyze, it also decreases the number of companies discarded due to an inflexible screen. Therefore, Portfolio123’s stock ranking systems helps investors quickly find the best companies that fit specific factors without eliminating those that are stronger in other areas. Users can use predefined ranking systems or create their own using over 500 technical and fundamental factors. Moreover, users can create their own factors using a custom function, such as in Excel.
After selecting the stocks for a portfolio, Portfolio123 provides a useful tool for monitoring and maintaining it. Perhaps the most useful feature here is the ability to specify buy and sell rules for a particular portfolio so that the investor is alerted when it may be a good time to buy more or when to consider selling. The portfolio tool will help with everything from position-sizing to portfolio-hedging.
Portfolio123 truly offers a wealth of useful features that serious and devoted investors can benefit from. Although the service may be expensive for some investors, a free 45-day premium trial is available. Moreover, Portfolio123 is still expanding its services, such as a new optimization feature in the Tools tab.
Price: free basic membership; $995 per year for an individual premium membership ($1,995 per year for professional); free 45-day premium trial (credit card required)