A Hand for Heavy Lifters

First, a confession.  I made a huge mistake in the version of this column that was printed in Barron’s in the June 19 edition.  I had a correction published in the July 3rd issue, but here in InvestorBrain I have done some editing to get rid of the problem altogether.  If you have access to Barron’s Online, you can see the original messes.  I have posted the link at the end of this piece and of the July 3 column.

HOW CAN I KEEP TRACK of my portfolio performance, especially when I’m trading more than just stocks?” It is one of the questions I’m most frequently asked, and there’s no single answer. It might be best to put your personal finance program, such as Intuit’s Quicken or Microsoft’s Money, to work. Or it might be worth checking out programs that are designed for heavier lifting.

Portfolio Systems, based in New York City, publishes several programs aimed at this group of muscular users that includes frequent traders and portfolio managers.

Of these, Option Money (last reviewed Oct. 29, 2001, “Exploring All Options"), intended for the very active individual investor, does a terrific job of tracking options positions as well as helping prepare your tax returns. The program has 40 options strategies built in, including a variety of spreads, butterflies, condors, straddles and strangles. The program’s analysis module provides the graphing of volatility, profit/loss and the “Greeks,” as well as other intriguing analysis.

Option Money also tracks futures, fixed income and mutual funds. If the 40 built-in trading strategies aren’t enough, you can create your own. Its reports, which can be customized, are helpful in figuring out which trades are working for you, and which are costing you money.

One of our chief criticisms the last time we looked at Option Money was that it required manual data entry. Portfolio Systems has fixed that in its current version 7 (development of version 8 is under way, and should be published later this year). You can now import transactions into Option Money from online brokers including E*Trade, Fidelity, Schwab, optionsXpress, TD Waterhouse, Ameritrade and others. The full list is available on Portfolio Systems’ Website, https://secure.scscompany.com/brokers.htm. (Note that some brokers, such as E*Trade, prevent you from downloading transactions during market hours.)

Option Money will set you back $30 a month, or a one-time payment of $345. Active traders who want to analyze their portfolio performance ought to look at the demo and take advantage of the free trial period.

For the professional portfolio manager, broker/dealer, hedge fund manager, family office or investor with multiple active accounts, Portfolio Systems offers Portfolio Director (http://www.portfoliodirector.com). This program offers consolidated reports, market data in real time, quick profit and loss calculations and the ability to generate numerous customized reports.

Portfolio Director is designed to be expanded as the number of users increases, and costs $150 per month for a subscription. It can import data from most online brokers, or the user can enter them manually. The opening page gives the user access to a number of summary reports that take various cuts at portfolio performance. In addition, the user can create a customized benchmark, such as a group of stocks or several indices, and use it for comparison.

Advisers will find client-management capabilities, such as templates for model portfolios, customizable reports and Web access to reports. Version 8 is currently available.

TRANSITIONS: I’VE HEARD from quite a few former Brown & Co. customers who have been transmogrified into E*Trade (ticker: ET) clients. Overall, this transition has gone significantly more smoothly than the Harrisdirect takeover, which began in January and dragged on for several weeks. I received about 400 e-mails complaining about that hand-off, and only 35 missives about the BrownCo linkup—several from people who were also Harrisdirect customers.

Harris had about twice as many customers as BrownCo, but the 90%-plus reduction in complaints tells me that E*Trade was better prepared this time around.

One of the biggest mishaps communicated to us involved a stock split the day the transition was completed. The customer promptly entered an order to sell off his post-split shares, but the transaction got seriously muddled, resulting in short sales, margin calls and a variety of other problems. I forwarded this customer’s complaint to my contacts at E*Trade, and an E*Trade senior vice president called the customer and fixed everything.

We’ve gotten several messages from former Brownies who wanted to know why they had to enter the cost basis for their positions manually once they were moved to E*Trade. Unfortunately, cost basis in Brown’s portfolio reporting was not available online, forcing customers to maintain it themselves. The lack of electronic storage meant the data couldn’t be transferred to E*Trade. The result? Some unpleasant data entry.

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