My wife and I each have 401(k)s and IRAs, and we also hold other taxable accounts. I have separate portfolios set up for each of these accounts in Morningstar.com's Portfolio Manager tool
; that setup works well for monitoring purposes. But is there any way to see the overall asset allocation for multiple portfolios--for example, all of our retirement accounts combined?
The short answer is yes. Morningstar.com's Portfolio Manager tool has a handy feature called "Combine" that lets you merge multiple portfolios into a single portfolio. Many users don't know about the feature, but Combine can be valuable if you'd like to monitor each separate account on its own while also checking up on your aggregate portfolio's performance, dollar value, and asset allocation. (As I noted in this article
, it's your portfolio's overall asset allocation--rather than its suballocations--that really matters.)
It's also worth noting that using Combine doesn't do away with already-existing portfolios (unless you want to remove those portfolios). Rather, you can maintain each of your subportfolios for tracking purposes while also maintaining an overall combined portfolio.Get Ready to Combine
To use Combine within the Enhanced version of Morningstar Portfolio Manager, click on the Portfolio tab on Morningstar.com. In the main navigation bar within Portfolio Manager, mouse over the Create tab and click on Combine.
If you're using our Portfolio Manager Classic, go to the Organize Portfolio section toward the top of Portfolio Manager, and click on the icon that looks like a suitcase with a plus sign on it. (You should see the word Combine when you mouse over this suitcase.)
Users of either version of our Portfolio Manager tool will then see a list of all of their portfolios; simply check the boxes next to the portfolios that you'd like to combine into one, then click Combine. You'll see a popup screen assuring you that your original portfolios and/or watch lists won't be altered. (You can also choose to cancel Combine at this point.) You'll be prompted to name your new combined portfolio and designate it as a watch list or transaction portfolio. (A transaction portfolio lets you input future purchases and sales and reinvest dividends, and therefore allows you to track your portfolio's performance with a high level of specificity, whereas a watch list portfolio is a simple way to keep track of a static basket of stocks and funds.) Click Save at the bottom of the screen, and voila--you've created a combined portfolio.One Account, Multiple Goals
At the time you name your new combined portfolio, you'll also have the opportunity to remove any of your portfolios' underlying holdings, thereby customizing your combined portfolio. This feature can come in handy if you're using some of your accounts for multiple savings goals. For example, the holdings in your 401(k) and IRAs are very likely geared toward retirement. But perhaps you hold a taxable account that houses some holdings geared toward retirement and other investments geared toward nearer-term needs, such as next semester's tuition or your next property-tax bill. To see the asset allocation for the retirement component of your portfolio alone, simply uncheck the holdings that aren't retirement-related, then click Save.
Using the Combine feature can help you track the performance and allocations of investments you have earmarked for specific goals. Creating a combined portfolio can also help you get the maximum mileage out of Morningstar's Asset Allocator tool
, which harnesses your underlying portfolio information to help you arrive at a customized asset-allocation plan.See More Articles by Christine Benz
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