In today’s blog post, I’d like to talk about two important features we recently added: importing a portfolio in the app and generating PDF reports. But before walking you through an example to help you out, I’d like to take a moment to talk about something retail traders and even financial advisors often overlook: ex-ante and ex-post risk analysis of a portfolio.
Ex-ante is latin for “before the event”, while ex-post is “after the event”. Both types of analysis endeavour to address a different issue: the first one being, how risky will my portfolio likely be in the future, while the other is how risky was my portfolio in the past?
Strangely enough there is a substantial amount of people who invest without trying to address the first issue, and maybe understandably so considering the lack of tools available to do so. There are hundreds of platforms, whether it’s your broker or a third-party tool to help you track daily how your current portfolio performs, but nearly none that actually give you insight as to how risky your portfolio is or could be.
Too many people buy stocks or ETFs without knowing how much they can actually likely lose (or win). The whole point of backtesting a simulated portfolio is specifically to address this issue. How diversified would my potential portfolio be if I added X or Y? How much could I likely lose in a month? in a year? How volatile would it be? Am I psychologically prepared to endure this?
At the heart of Financial Node is backtesting in order to enable users to perform ex-ante analysis so that they can make more informed decisions before actually investing. So before clicking on that buy button on some ETFs and sprinkling some stocks over it, just make sure you know what you’re dealing with. And if you’ve already got a portfolio of stocks on the market and want to evaluate the risk profile of your portfolio, with our recent update you can now quickly do so.
Importing a portfolio
First off, export your tickers in the following format: Ticker Code, Description, ISIN, Quantity. Make sure it’s in a comma separated value file (i.e .csv file). As an example, we’ll import the following tickers:
Now head over to the workspace, click on the Tool button, and select ‘Import portfolio’. Just follow the wizard and you should be good to go. Feel free to re-arrange your tickers as you wish by grouping them in different categories like below:
If you prefer to view your portfolio in a linear classic view, just click on the toggle underneath the canvas:
This is what you’ll get if you’re more familiar with this type of view:
Generating a report
Once you’re settled, as per usual, click on the Backtest button and check the various metrics below to analyze how risky your portfolio is. Now, to go further, if you wish to share it with peers – back in the Tools menu, click on Create Report (be sure you backtested your portfolio before!). This will automatically generate a PDF report for you as follows:
Hope you enjoyed this short walkthrough! Comment and tell us what you think or send us mail at firstname.lastname@example.org
And remember, you're just a click away from trying it out yourself!