Morningstar X-Ray: Analyzing All your Investments in One Place
Jan 19th, 2011 by Carlos
January is a great time to do all those things you never think about during the year but know you have to do at least once a year.
So this is when a lot of people are doing “annual checkups” on things like their bills, paperwork, re-balancing your portfolios, etc.
I want to add one more thing to your list: taking a snapshot of all your investments with the Morningstar X-Ray tool.
It’s a great tool that helps investors take an overall look at all their holdings in a new and fresh way. And even if you don’t look at it as closely as I”m about to do, it’s still kind of fun to see where you’re money is invested and how it compares to the S&P.
I last used the X-Ray tool back in 2008 but have now incorporated it into my annual routine.
Let’s take a look at what it says about my Roth IRA, which is where I own most all of my investments:
Asset Allocation
The chart on the left shows me where my money is—and as you can see about 74% of my investments are in US stocks. The rest is in foreign stocks and I have a tiny sliver of cash.
For the most part, I’m 100% invested in stocks.
I’ve been meaning to add a little bit of bonds to this mix, but with the whole bond bubble going on, I’ve delayed that. I’ll be turning 30 this year so I think it’s time to at least add some bonds to start building on as I get older.
Stock Style Diversification
Only the valuation box has any value for me here, and it tells me I’m focused basically on large companies. I have a bit of exposure to mid caps, but I should have a more defined view on how much small cap stuff I hold.
I’ve been meaning to add a small cap index fund from Vanguard but last year I went with their REIT index fund instead. So this is a good reminder that this is probably the year I buy some small cap stuff in the portfolio.
Stock Sector
This one has some pretty interesting bits of information. For one, it shows I’m light in the technology sector, which is weird because I’m a big tech guy and all the trades I make in my “mad money” account are tech related. So this is interesting…I should probably change something here to at least match up with the S&P.
The other bit that’s interesting is how heavy I am in the financial services area. I’m guessing this is mostly due to Berkshire Hathaway since most of the funds I own mirror the S&P in one way or another. Having the S&P comparison right there for me is perfect since that’s how I like to judge my performance.
Stock Type
All I can learn from here is that I’d like to be closer to the S&P when it comes to classic growth and aggressive growth. I don’t want to mirror the S&P exactly (boring), but for those two line items I’d like be a little closer. Not much else for me to see here.
World Regions
I guess this is to be expected: I’m concentrated mostly in the US and Canada. I do have a fund dedicated to international stocks, but it’s spread out very thinly across lots of countries, so that’s why this still looks like I’m mostly in the US and Canada.
I’d like to spread it out even more and get heavier in Latin America (Brazil) and Asia and not so concentrated in Europe. That’s kind of scary to me right now, what with Greece and Ireland having the issues they’re having.
Fees and Expenses
This one is my pride and joy. My expenses are really low and there are two reasons for that:
- I use Vanguard index funds for a large portion of my investments
- I am very careful about which investments I pour money into—expenses play a major role in the selection process, regardless of the account I’m investing in
Every dollar you spend on expenses is a dollar you have to make up in performance, so the less you pay, the better off you’ll be.
Stock Stats
The S&P comparison here isn’t as valuable since the numbers are so far off. I’m guessing that’s due to the nature of the S&P vs. my portfolio of holdings, but if anyone else has some enlightening thoughts on this section, feel free to share.
Conclusion
I highly recommend people use this tool. You might find some interesting things about where your money is that you didn’t know before.
It’s always good to take a step back and look at things in a different way, and this tool makes it easy and interesting to do just that.
