Social Investing for Dummies

Being Active for a Passive Income

Creating and maintaining a high growth portfolio is not a passive task at all. eToro is for those of you who are learning the art of investing and are willing to spend around 4 hours in a week analysing your positions and investments. I love the data I get from eToro dashboards. However, during my journey towards a stable passive income, I found that keeping a consistent record or an investment journal noting my investment fluctuations helped me understand the stocks and observe the investors more intimately. I would highly recommend setting up an excel sheet of your own or following my methodology in recording data from eToro.

 

Investing journal entry

The screenshot shown above is a part of my Excel-based investing journal where I log in daily data from eToro to better understand how my portfolio is progressing towards my goals. I update each trader’s stats (Holding time, trades per week and risk level) once in a month in order to keep a track of the investors and find out any noticeable variation in their activity. This also helps identify investors who turn dormant after a certain amount of trading activity.

In the document, you can see the popular investors and their stats. You can also see my investment in them back in early January. I tend to keep my risk score below 3.5 and I think it is a carefully struck balance between the exciting bull runs and the rather disheartening bear runs. If you look at my investments today, you can see a well-diversified portfolio which we will discuss in the next chapter. Diversification also helps in reducing your risk score while getting you excited about bull runs. At the end of the day, we investors do love a good bull run.

There is a special section of eToro that is often overlooked by regular investors. It is the account statement, a massive data bank on every investment decision you have made. It even includes the trade positions opened and closed by your investors. This specific week was really bullish and hence my assets appreciated well. How do you get the below data table from your account? Access your portfolio on eToro and then click on the History tab. You can now have a look at your recent history. To the top-right of the screen you can see a gear icon. Click on it and you can see Account statement among the drop-down menu options.

I tend to follow the account statement on a weekly basis in order to see my realised and unrealised earnings. Realised earnings are dollar profits on your hand, say from a sale of an appreciated asset/investment. Unrealised earnings are basically paper profit. You have made that much profit so far however you can only realise that profit once you close the trade. These basic yet crucial housekeeping measures will ensure that you stay on top of your game. A few hours of active involvement in a week will deliver surprising returns on an otherwise passive task.

I hope that you have clearly understood this chapter as keeping track of investments is crucial to a person’s investing life. The next chapter will talk about the art of diversification and the question of finding the optimal fit for your assets.