Key Things You Should Be Monitoring in Your Portfolio

A company’s financial performance can fluctuate due to a variety of internal and external factors such as changes of leadership, company mergers, and acquisitions, market disruptions, among others. If you are a portfolio manager, you need to make sure you are aware of these factors and can monitor them in real-time. Doing so will empower you to proactively manage risks and exploit opportunities. This is also essential for minimising risks and boosting the health of your portfolio in the long term.

In this article, we will be looking at the key things that you should be monitoring.

Key Factors & Events You Should Monitor

Leadership/Management Changes
A company’s performance is to a large extent determined by the decisions enacted by its leaders. Hence, you will need to research the professional backgrounds of key executives at your target company and monitor any mentions of them in the news. You will also need to be aware of any official announcements or rumours about leadership changes.
In addition, it is advisable to keep track of any changes in political leadership in the country that you’re invested in as this may also affect your target company’s market.
Earnings Fluctuations
It’s critical to monitor your target company’s earnings at all times. You need to keep an eye on things like profit and loss forecasts, sales target revisions, valuation changes, and analysis reports.
Business Expansion
Look out for any signs of business expansion. Has your target company increased production capacity, expanded its retail or distribution networks, or entered a new market? Has it seen substantial growth in its customer base or announced plans for mergers and acquisitions? These are all signs that the company is scaling up its business operations.
Business Disruptions
There are several things that can disrupt a company’s business activities. These include natural disasters, adverse weather conditions, civil unrest, power outages, and more. Disruptive events can seriously affect a business’s financial outlook in the short or long term.
Upsizing/Layoffs
You can get a good idea about a company’s health and the direction it is heading in by looking at personnel changes. If a company is actively conducting recruitment drives, it is probably gearing up for expansion. If it is laying off workers, it may be looking to scale back operations, possibly due to financial pressures.
Fundraising Activities
You will need to monitor your target company’s fundraising activities. Look for news on initial public offerings (IPOs), private placements, rights issues, the issuance of debt instruments like bonds and notes, and capital injections by venture capitalists and other investors.
Financial Statements & Strategy
It is advisable to read quarterly and annual releases from the company you are watching. Look at the company’s financials. Are sales growing? Are earnings higher than 12 months ago? It’s also good to consider the company’s business plan. Are there new products or services on the horizon that will boost revenue? Is the book value of your investment growing in line with reported earnings?
Company News
You should be constantly monitoring company news for positive or negative mentions of your target company or any associated brands or products. Be on the lookout for public comments from the company’s leaders or news reports about them which could affect the company’s reputation. Study financial reports and analyst commentaries. Keep up to date with any developing stories that have implications for the company. Pay particular attention to corporate press releases, reports from analysts and research firms, stories from news media, and stock exchange filings.

Leveraging AI Technology to Track Your Portfolio

Portfolio management requires ample attention for you to spot opportunities and threats and make informed decisions beforehand. But since there are a number of factors you need to monitor at once, it’s imperative to organise and make sense of all this information in a timely fashion. You will need to harness the power of artificial intelligence (AI) to streamline the process.

AI dramatically accelerates the information curating process while minimising the amount of human labour required and ensuring that important details are not missed. Since AI understands context, it can filter out irrelevant information and draw your focus to the things that matter. This frees up time for calculated decision-making.

ScoutAsia uses the latest AI technology to help portfolio managers monitor companies in Asian markets. The platform’s “Scout AI” feature can be used to create custom alerts to monitor topics and events that matter to you. ScoutAsia allows subscribers to create watchlists of specific companies and topics and receive updates on the app or via email alerts.