It has never been easier to be an informed and engaged stock market investor. Today, investors can get excellent asset management for free (using M1 Finance) or inexpensively using Wealthfront, Blooom or Betterment.
On top of that, the best software and information for investors is readily available online for free. One of the tools that is making investing more democratized than ever is DIY.Fund. It’s a completely free database that gives investors the tools that professionals use.
It has a charting software that gives you free to the minute data on a variety of stocks, options and ETFs. You can get daily email updates on your personal portfolio’s performance (including your actual returns, your alpha (outperformance), and your beta (portfolio risk).
Investors who adhere to a strict quarterly or annual portfolio rebalancing may not need the tools that DIY.Fund offers, but individual stock investors and those using a 3, 4 or 5 factor investing model should consider DIY.Fund one of their top free tools.
Here’s how DIY.Fund works, and how you can use it.
Track Your Portfolio
The philosophy behind DIY.Fund is that every investor should have the tools to manage their personal portfolio like a professional. That means that you get analytics that are customized to your portfolio.
To get the most out of DIY.Fund, you’ll want to upload a CSV file with your portfolio positions (and the day you acquired those positions). Most brokerages have options to export all your current positions to a file. This is good enough to get you started.
Once you have your portfolio uploaded to DIY.Fund you’ll get daily email recaps. These will tell you about your portfolio and how it performed relative to the S&P 500 benchmark. (If an extra email sounds like overkill, you can opt out).
Analyze Basic Portfolio Metrics
Once you have your portfolio uploaded, you can analyze it using asset level, sector level, or by looking into “simple” statistics. I should note that the simple stats are nearly impossible to calculate by hand.
These metrics are a must have for individual stock investors. Stock investors can easily become overweight in a single sector, or they may accept more volatility than is appropriate for their risk tolerance.
It also can help you gain an appreciation for your total portfolio allocation if you have investments in multiple brokerages (although Personal Capital will also do this for free).
Having these numbers easily accessible, makes it impossible to ignore your actual portfolio performance. It also makes it far easier to control your investing behavior (which is the only part of investing you can control).
Investigate Using Up-To-Date Charts
While I use the statistics for my portfolio, I primarily use DIY.Fund for “Statistics” feature. DIY.Fund has to the minute statistics for hundreds of different metrics.
These include fundamental metrics like P/E ratio, and more technical indicators like oscillators and relative strength indicators.
No matter what your investing strategy, you can likely use DIY.Fund’s charts to show whether you should purchase a stock, sell a stock or continue without action. The statistics section includes a watchlist, so you can stay up to date on every position you’re considering.
Who Should Use DIY.Fund For Investing?
If you invest in individual stocks or you follow a factor investing model, you’re likely to gain value from using DIY.Fund.
While it doesn’t include a free portfolio back-tester (like portfolio visualizer) it’s one of my top recommendations for people who want to learn more about investing.
Passive investors who rebalance a few times a year might not need DIY.Fund, but almost everyone else should consider it. Since it’s free, the only cost is the time you put in to update your portfolio.
What are your thoughts about DIY.Fund? Would you ever use it?