For the most part, the rise of online brokers is great for individual investors…
It’s now easier than ever for folks like us to get in on the investing game. We can make trades with just a few clicks as long as we can access the Internet. We can even do it from our smartphones.
But there’s one big problem with most of the largest online brokers…
The way they display returns doesn’t paint the whole picture for a stock.
Let me explain…
When I log in to my account on Fidelity’s website, for example, I’m presented with a pair of return statistics. The website shows “today’s gain/loss” and “total gain/loss” for every position in my portfolio.
Now, these two percentages provide some important information…
The first one tells me what’s happening with each stock right now. And the second one tells me what has happened with each stock since the day I bought it.
But that’s where the problem comes in…
You see, as I said, these two statistics that every investor sees as soon as they log in don’t paint the whole picture. Importantly, they don’t tell you anything about the stock’s current trend.
For example, let’s say you bought e-commerce powerhouse Shopify (SHOP) on January 3, 2019. If you checked your returns on November 18, 2021, you would’ve seen…
Those returns are incredible. They’re what every investor wants to see.
However, if you would’ve done the same thing earlier this week, you would’ve seen…
Shopify gained more than 6% on Monday. That’s a great one-day return, too. And frankly, I don’t think many folks would complain about a 623% return in three years.
But when you put the returns in context, you see that Shopify is mired in a severe downtrend… The stock is down roughly 50% over the past 10 weeks.
If you only looked at your account every once in a while, you would’ve completely missed Shopify’s trend change… And that would’ve cost you a lot of money.
I use our Power Gauge system to solve this problem. You’ll be surprised at how easy it is…
Every morning, as soon as I log in to the Power Gauge, I see the “Dashboard” section. It contains all the stocks on any of my customized lists, as well as their returns across different time frames…
That’s why this feature is my favorite within the Power Gauge…
With lists, I can put all of my stocks in one place. I don’t need to go back and forth between brokerage accounts. And more importantly, I can see every stock’s movement over different periods. That way, I’ll know right away if I should be worried about any of them.
The dashboard also shows the current Power Gauge rating for every stock in my list… That’s another way for me to know instantly if I should reconsider any of my positions.
The bottom line is simple… In order to get the full picture on every stock you own, you need to keep a closer eye on your portfolio than most online brokers give you as soon as you log in. After all, investing is about more than just one-day and total returns.
Fortunately, the Power Gauge helps me see how trends are playing out with my stocks. But even without it, just remembering to go beyond the basics will make you a better investor.
Good investing,
Karina Kovalcik
