DIY investing for busy people—the portfolio management tool you didn’t know you needed

By Tamar Satov on July 7, 2020
Estimated reading time: 4 minutes

Forget spreadsheets and endless hours in front of the computer. Smart DIY investing that shows returns can be done with a passive investing app. Here’s how.

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If you’ve been on the fence about managing a self-directed brokerage account because you think DIY investing is too much of a time commitment, think again. While DIY investing certainly can be an all-consuming “hobby” filled with spreadsheets, calculations and trade activity, it doesn’t have to be—thanks to a portfolio management tool called Passiv*. It makes DIY investing for retirement easier by handing many of those all-consuming tasks for you. Passiv works in tandem with your Questrade brokerage account to put your portfolio management on autopilot. Still not convinced? Here are some of the ways Passiv removes the roadblocks to DIY investing, so even those with the busiest schedules can go do-it-yourself investing.

Portfolio monitoring with Passiv

One of the most important aspects of managing any portfolio is maintaining an asset allocation that aligns with your risk tolerance and investment goals. If you’re young and using it to save for retirement, you might opt for an aggressive portfolio that’s 75% equity assets (like stocks and growth funds) and 25% bonds or other fixed-income investments. While such a portfolio is riskier because equities can be more volatile, it also offers the potential for better long-term returns—and you have lots of time to weather the ups and downs of the market. Those market fluctuations, however, can mess with your asset allocations. For example, if bond markets vastly outperform equities for a given period, you could find the value of your fixed-income assets creeping up to 30% or 40% of your total portfolio, a far more conservative approach than you wanted. But how would you know when that allocation “drift” gets beyond your comfort level? If you have the time, you could log in to your brokerage account regularly, calculate the percentage of your holdings by asset type, and see how that measures up to your preferred allocation. Alternatively, you could use Passiv to know how far your assets have drifted from your target asset allocation—making things a lot easier and saving you from having to do the calculations yourself. Once you set up your target portfolio in Passiv and link it to your brokerage account, the app will securely monitor your holdings and provide an ongoing accuracy score for how closely your current portfolio values match your target. If the accuracy score drops too low, Passiv will notify you that a change is required to stay aligned with your target allocation.

Cash and dividend notifications from Passiv

Many DIY investors set up monthly pre-authorized transfers to their brokerage accounts to prioritize savings and investments—a strategy often referred to as “paying yourself first.” Unfortunately, it’s then up to the investor to remember the cash is waiting there to be invested. It’s not hard to imagine a scenario where several months’ worth of contributions could pile up, earning zero investment returns. Similarly, investors might receive dividend payments without realizing it, and end up leaving those funds in cash instead of reinvesting them. Let your portfolio management tool help you put that money to work for you. Passiv notifies you whenever cash transfers or dividend payments arrive in your brokerage account, so you can go ahead and invest that money instead of letting cash deposits drag down overall returns.

Get trade calculations and place trades using Passiv

Knowing that you have money in your account available to invest or that your portfolio has drifted off target is only half the battle for DIY investors. The next step is to determine how many units of each asset you should buy, at their current prices, to align or rebalance with your target allocations. Thankfully, Passiv does the math for you so you don’t have to spend hours with your head in a spreadsheet. The popular passive investment app outlines the specific trades necessary in the notification to keep you on track, which you can then make in your brokerage account. You can also alter the calculated trades based on your investment strategy. For example, users can set up cash management rules to let Passiv help them with dollar-cost averaging. If you want to simplify the process even further, upgrade to Passiv Elite* ($99 annually, or currently free to Questrade clients) to execute those trades in a single click. Passiv is made exclusively available to all Questrade clients in Canada.

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