If you are using My Portfolio to track investments, the Diversification Analyzer tab displays pie charts and analyses designed to show you how diversified your portfolio is. The tab is the farthest to the right when viewing a portfolio and is only available to A+ subscribers.
If you haven’t created a portfolio within My Portfolio, visit the A+ Investor User Guide for a walk through of setting one up. There is a guide for each major resource of your A+ Investor subscription.
Please note that if you don’t enter the number of shares you own of a given security in your portfolio, the Diversification Analyzer will not be able to provide a breakdown of your portfolio. The number of shares is needed to calculate individual holding and overall portfolio values.
The Asset Allocation Analyzer breaks down your portfolio’s holdings into five broad asset classes: domestic stock, foreign stock, bonds, cash and other. AAII has three asset allocation models for you to compare your portfolio to: conservative, moderate or aggressive. In the Asset Allocation Analyzer box, select which kind of investor you think you are in terms of risk tolerance by hitting the Edit button. Does your portfolio match the risk tolerance you’ve chosen?
Depending on the type of risk you want your portfolio to capture, the allocation analyzer shows how much your current allocation differs from the suggested allocation of the modeled risk tolerance. When you are overweighted in an asset class relative to the suggested allocation, the difference is shown in red, while green indicates an underweighting. This tool is useful because it offers you insight into whether you are taking on too much or too little risk, given your acceptable risk level.
The Sector Diversification, Size Diversification and Geographical Diversification analyzers break down your portfolio across individual stocks and the equity portions of any mutual funds or exchange-traded funds (ETFs) in your portfolio. It does not consider bonds.
These tables and charts offer a quick visual reference for your portfolio’s exposure points. If you change your portfolio to align with a different asset allocation and risk tolerance, you can track the diversification changes here. Before making actual portfolio changes, the My Portfolio tools allow you to see the hypothetical impacts of your decision.
