Is Investment Integration
Right for You?

Your investments are just one piece of your wealth. Here’s why they should be integrated into the rest of your financial life.

In a perfect world, the decisions you make about what stocks and bonds to buy would coordinate perfectly with every other financial decision you make. But we all know life doesn’t often happen that way. Markets tumble when a big bill is coming due. Interest rates rise as you’re shopping for a mortgage. The ability to have clear insight into every aspect of your financial life—investments, borrowing, savings, spending and bill-paying—can help smooth out these peaks and valleys, and further, may help you make smarter financial decisions.

The ability to have clear insight into every aspect of your financial life can help you make smarter financial decisions.

But it’s not enough to simply know these financial markets. To truly get the most benefit from this knowledge, investors have to take an integrated investment approach. Simply put, this means viewing all your assets and liabilities as a coordinated whole, rather than as segmented, separate entities.

Truth be told, most folks spend more time figuring out what assets to own and in what percentage than they do thinking about how those assets coordinate with the rest of their financial life. It may seem overwhelming at first to look at all these different pieces together. But by doing so, you could get a much clearer picture of things like costs, taxes, risks and other important aspects of your investments and overall finances.

Monitoring all your assets in the same system allows for ongoing rebalancing and other necessary adjustments to your finances. Interactive Brokers (IBKR), a Greenwich, Connecticut-based securities firm in business for 41 years, gives investors this ability with its PortfolioAnalyst, a robust performance reporting tool that provides consolidation, tracking and analysis across different financial accounts. At a glance, it lets individuals view everything in one place from any desktop or mobile device. Equally important, it enables them to link their investments, checking, savings and credit card accounts in one place—even if they’re held at different institutions.

By integrating your investments into the rest of your financial life you create a roadmap for yourself.

That’s key since the activities in one area can greatly affect another. For instance, if there are investments with a significantly large tax impact, you would prefer to hold them in a tax-deferred account. If you have both a company-sponsored plan, like a 401(k)An employer-sponsored retirement savings plan. 401(k) plans are typically self-directed. You decide how much you would like to contribute and which investments from among those offered by the plan in which you would like to invest. and another portfolio, an integrated investment approach would enable you to hold investments in a beneficial way.

An integrated investment approach also takes into account not just returns, but the amount of money being spent. Mortgage, credit card and life insurance policy payments typically occur each month, so it’s easy to overlook their cumulative impact on your overall financial position. Further, payments on high interest rate credit cards with balances carried from one month to the next can easily wipe out returns on a short-term savings instrument like a CD. But if you’re able to see summary values for all your accounts in one place, it’s easier to spot these issues and course-correct. IBKR’s PortfolioAnalyst enables investors to view activity by an individual date or date range, and drill down to view investment positions and transactions by account, or even by asset class. Investors can generate reports with easy-to-read, color-coded charts, making tax time that much less stressful.

And finally, by integrating your investments into the rest of your financial life you create a roadmap for yourself. After all, it’s easy to be swayed by economic news that may or may not have an impact on your holdings. Making decisions on one part of your portfolio without considering the ramifications on any other part, is short-sighted. But when every piece of your financial life is integrated and working in concert, the ups and downs of the market can be seen in a more holistic light, and you’re better able to stick to your goals.

This content was paid for by an advertiser. The views and opinions expressed herein do not necessarily reflect those of Nasdaq, Inc.