The right tool for the right job can make all the difference. Not only does the right tool improve the quality of any job, but it also makes the work more enjoyable. This fundamental truth applies to everything from carpentry to auto repair. It also applies to investing.
Since the rise of the defined contribution plan, just about everybody is or should be an investor. Whether contributing to a 401k, IRA, or both, investing has become a necessary skill to successfully build a retirement nest egg. The good news is that there are a number of free tools available to help make you a smarter investor.
Here are four of these great investing tools.
Personal Capital
Personal Capital offers a free online tool to track investment returns, evaluate asset allocation, and monitor investment fees. Once investment accounts are connected, Personal Capital automatically updates a portfolio's performance, offering charts and graphs to better understand an overall portfolio.
The tool allows investors to track 401k, IRA and taxable accounts. It's cash flow tool enables investors to easily track reinvested dividends. And its 401k Fee Analyzer shows how much a 401k retirement account is costing its participants.
Morningstar
Morningstar offers the most comprehensive information on mutual funds found anywhere. Entering a fund's ticker will reveal detailed information, including the fund's expense ratio, minimum investment, top holdings, market capitalization, value/growth orientation, and geographic exposure. The site also offers great investing content from experts, as well as a very active discussion forum.
In addition, Morningstar has a tracking tool that provides a wealth of information about an investor's portfolio. The tool can easily track total fees across an entire portfolio, reveal the specific companies each mutual fund owns, and track the percentage exposure an investor has in each mutual fund or ETF.
Vanguard
Vanguard is best known for its low cost, index mutual funds and ETFs. Less known are the educational resources available on its website. The mutual fund giant offers insight into the major investment topics, including retirement, education, and taxes. It also offers 4 timeless investing principles that every investor should read.
Better Money Habits
The last free tool is the result of a partnership between Bank of America and the Kahn Academy. Called Better Money Habits, the website aims to improve financial literacy. Its focus is more on personal finance than investing, which is precisely why it made this list.
Sound investing requires capital. Without sound money management, it's easy to over spend. Yet it is only by spending less than we make that investing for retirement is possible. The Better Money Habits website can help you do just that.
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