Portfolio123 Review – Portfolio Management Tools

About Portfolio123

Portfolio123 is a portfolio management and investment research platform built for self-driven investors. The platform offers advanced tools for creating, backtesting, and optimizing investment strategies, plus pre-made investment strategies to help you get started.

So, can Portfolio123 help you invest more profitably? In our Portfolio123 review, we’ll take a closer look at everything this platform has to offer.

Portfolio123 Pricing Options

Portfolio123 offers three pricing tiers: Free, Screener, and Pro Plans.

The Free plan mainly offers Portfolio123’s portfolio tracking features. You can link brokerage accounts, build watchlists, and access basic information about stocks.

The Screener plan costs $25 per month. It offers access to Portfolio123’s stock and ETF screener and 5 years of stock data for running backtests.

The Pro Plans subscription costs $1,000 per year and offers multi-factor stock ranking systems, rolling screens, hedging and shorting strategies, and a strategy optimization tool. It also offers access to the Portfolio123 API and 20 years of stock data for backtests.

You can try out Portfolio123’s Pro Plans subscription (not including the API) for 21 days for $9.

Portfolio123 Features

Investment Models

One of the important features that Portfolio123 offers is access to investment models. The platform has 18 pre-built models for stock, ETF, and bond investing. Each model follows a rule-based strategy and includes a portfolio of 10-25 assets. You can see how the portfolio has performed since inception as well as in backtest results for the past 10-20 years. Some of the available stock strategies include Underestimated Blue Chips, Small Cap Quality, and Expecting Dividend Growth.

Once you choose a model, you can add it to a portfolio and select how much you want to invest in the strategy. Portfolio123 will recommend position sizes, which you can modify, and can automatically place orders with your brokerage for execution.

Portfolio123 also enables investors to create their own custom stock or ETF investment strategies. These strategies can be connected to a brokerage account for live trading or can be simulated with a paper trading account.

The strategy designer is relatively easy to use. You can begin by choosing the universe of stocks or ETFs to include in your strategy and then a ranking system to select stocks in a portfolio with a maximum number of positions. You can select buy and sell rules to apply from a long list of technical and fundamental conditions. Portfolio123 also allows you to create conditions around whether a stock is already in one of your other portfolios or how much cash you have available in your portfolio.

The strategy designer also includes a neat hedging feature. You can create an independent set of conditions that overrides your main strategy and forces a portion of your portfolio to cash or another low-risk asset like treasury bonds.

In addition, Portfolio123 allows anyone on the platform to submit custom investment models to a marketplace. Some of the models are free to follow, while others require a monthly subscription. Before subscribing, you can see a model’s recent trades with a 30-day delay, annualized performance since inception, and maximum drawdown.

Strategy Optimizer

One of the most powerful tools in Portfolio123 is a strategy optimizer. This allows you to test out different combinations of parameters for any of the custom strategies you’ve built. You can run backtests based on multiple time windows, different combinations of buy and sell rules, different position sizes, or different hedging options.

What’s nice about the optimizer is that you can simply enter the different parameters you want to test, and Portfolio123 will automatically identify and backtest all of the possible combinations. For each combination, Portfolio123 calculates the annualized return, maximum drawdown, correlation, and total return.

Ranking Systems

Another advanced tool that Portfolio123 offers is its ranking system generator. This works similarly to a stock screener, except that the results are ranked based on weights applied to each parameter. So, for example, you can create a ranking system for stocks in which 6-month performance is given 50% weight, EPS growth is given 30% weight, and market cap is given 20% weight. The tool will then display a list of stocks in rank order based on these parameters and weights.

This is incredibly useful for finding stocks and ETFs to invest in. You can create an unlimited number of custom ranking systems using any of the technical and fundamental parameters available in Portfolio123. In addition, you can backtest your rank system’s results against the annualized performance of the S&P 500 to see whether higher ranked stocks in your system actually perform better.

Portfolio123 also includes 49 pre-made stock ranking systems. Several of these are based on the strategies of famous investors like Warren Buffett and Peter Lynch, while others are based around investing styles like growth or value.

Portfolio Management

Portfolio123’s portfolio management tools are free to use and form the backbone of this platform. You can link an unlimited number of brokerage accounts (taxable and tax-deferred) or create an unlimited number of paper trading accounts. Portfolio123 automatically imports new trade data, making it easy to keep your account up to date. In addition, you can place orders in Portfolio123 and have them sent to your brokerage for execution.

Individual portfolios can be associated with one or more investment strategies for automated trading. You can also take notes on your positions and tag positions as buy, sell, hold or revisit. Portfolio123 offers a detailed breakdown of your account performance based on strategy and enables you to benchmark your performance against more than a dozen market indices.

Stock Data

Portfolio123 isn’t a full-fledged stock research platform like StockRover, but it does offer an impressive range of research tools for investors who want to look into new investments. For all US stocks, the platform offers a snapshot of key fundamental data such as EPS growth, dividend payout, institutional and insider ownership, and fundamental ratios like P/E.

Portfolio123 also offers fundamental charts for dozens of metrics, making it easy to see how a company’s performance has changed over time. Another feature we like is the ability to compare multiple stocks. Portfolio123’s comparison reports cover valuation ratios, earnings, recent performance, and analyst price targets.

Compatible Brokerages

Portfolio123 is compatible with most major brokerages, including E*Trade, Charles Schwab, Interactive Brokers, Tradier, Ally Invest, Robinhood, TD Ameritrade, Vanguard, Fidelity, Merrill Edge, and others.

Portfolio123 Platform Differentiators

Portfolio123 is an impressive platform for long-term investors who want to build custom investment strategies. The tools for building and optimizing investment models are incredibly powerful and offer a virtually unlimited degree of flexibility. They’re also relatively easy to use, and Portfolio123’s pre-built models ensure that investors don’t have to start from scratch when using the platform.

There are few platforms that offer the same range of tools for designing investment strategies as Portfolio123. Old School Value comes close, but has very few parameters related to technical analysis. StockRover offers comparable portfolio management tools to those in Portfolio123, but stops short of offering tools for strategy optimization.

The stock ranking generator in Portfolio123 is also relatively unique. This tool is arguably more useful than a traditional stock screener because it allows investors to rank screen results based on defined weights. So, it’s relatively easy to pick out the most relevant stocks for any screen.

What Type of Investor is Portfolio123 Best For?

Portfolio123 is designed for self-directed long-term investors who want to design their own custom investment strategies. While the platform is easy to use, it’s best suited for more experienced investors who understand how to interpret backtest results and can make the most of the strategy optimizer and stock ranking systems.

Less experienced investors can also benefit from Portfolio123’s portfolio management features. These features aren’t as unique as the more advanced tools that the platform offers, but they’re well-designed and available for free.

Pros

• Excellent portfolio management tools
• Create custom investment strategies with buy and sell rules
• Backtest strategies with up to 20 years of historical data
• Stock ranking systems are more advanced than traditional screeners
• Compatible with most major brokerages

Cons

• Very expensive Pro Plans subscription
• Limited stock research compared to other platforms