Getting on the right track with a stock market tracker

Financial literacy is a trending topic, as its relevance is being shown to us daily. The wealth gap is increasing, and inflation is on the rise. How to make sure that your money is retaining its value is a question to many. When it comes to investing, many people are hesitant. They do not understand the concepts, or are afraid that they make the wrong choices and trade with emotions (e.g., panic sell). However, when using a stock market tracker, you can make sound choices and bring focus to your investments.

Determine the potential strategies that work for you

Before you start investing, you need to define a clear strategy. Are you working towards a specific target? Want to save up to buy a sailing boat or car? All is possible, but it does affect the strategy you take. In the following sections, we will highlight investment strategies that could cater to your needs.

Passive investing versus active trading

If you have a long investment horizon (e.g., twenty to thirty years), a passive investment strategy might suit you best. This strategy focuses on diversification and a monthly (or weekly) transaction that adds to your investments. This allows you to spread your purchase price over time, reducing your exposure to market fluctuations. When looking at the returns of major indices such as the S&P 500, there is always a steady return you can enjoy. For this type of trading, you do not need any knowledge. Simply select a broad index fund and start with a monthly periodic investment.

Active trading, on the other hand, requires you to continuously monitor your stock market tracker. This approach can bring more value in the short term but also requires knowledge and a strong focus. A stock market tracker can help with this, as it provides you with all the market news you need. Next to that, you can set notifications for certain price changes. Note that we are not focusing on day trading, as this is a completely different (and often technical) take on trading.

Tracking progress through portfolio creation

Within a stock tracker, you can often create separate portfolios of your holdings. If you want to pursue different strategies, this is a helpful feature. You can have a section for your passive (long-term) investments, and one that focuses on the more short-term. You can also use it to categorize your investments (e.g., per industry). This allows you to analyze your portfolios in isolation and see if you are on track with the strategies you have defined.

Explore the stock market tracker options

Want to learn more about an investment tracker and its functionality? We encourage you to explore the options and see what works best for you. For example, there are trackers on the market that combine both stocks and crypto, allowing you to create a complete overview of all your holdings. By exploring the possibilities, you can create a set of requirements and select the tracker that suits those needs.