Personal Capital's New Investment Checkup

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Reveals the Health of Your Portfolio

Today, digital wealth management company Personal Capital will roll out a new investment planning feature to help its users more accurately measure whether or not they are on track with their investment strategies.

The new feature, called Investment Checkup, is designed to be the best place on the web to diagnose the health of your existing portfolio and get unbiased investment advice. Focusing on the most critical aspects of any investment strategy – asset allocation, appropriate balance of risk and return, and costs – the tool performs three essential calculations. First, after a user links their financial accounts, it calculates the asset allocation and measures the risk and return of the portfolio. Second, it runs thousands of Monte Carlo simulations to determine the projected growth of the existing strategy. And third, it runs a diagnostic “Advice Engine” to identify key risks and ways to balance risk and return more favorably.

The developers of Investment Checkup saw a demonstrable need to create the feature after assessing Personal Capital’s wealth of data and identifying a list of pervasive investment errors, including:

●    Inefficient Allocations – Most Personal Capital users take on more investment risk than needed for their expected return. To date, some 80% of users have a portfolio allocation that contains 10% more risk than need be for their return level, while 40% are taking 20% more risk.
●    Too Much Cash – While even the conservative investment portfolios should generally have no more than 10% in cash, the average Personal Capital user has 15% of idle cash in their investment accounts. An overabundance of cash leaves potential investment returns on the table.
●    Too Many Mutual Funds – Over half of Personal Capital’s users have a majority of their portfolios in mutual funds, which tend to not only perform poorly, but also charge high fees and are tax inefficient.

Personal Capital’s Investment Checkup tool takes the guesswork out of asset allocation and portfolio balancing. Through precise calculations, it helps investors determine whether they are on the efficient frontier – meaning their portfolio provides them with the highest expected return for a given level of risk.

Based on the user’s profile and expected future cash flow needs, the Investment Checkup recommends an optimal asset allocation, called a “Target Allocation.” It shows how close that investor is to this target and, in detail, what can be gained by revising his or her current strategy. The Investment Checkup feature concludes by offering specific recommendations to aid investors in rebalancing their portfolios. A step by step guide of how to use the feature can be found on the Personal Capital blog.

Investment Checkup, like all of the web and mobile tools in Personal Capital’s arsenal of financial products, is free, simple and transparent. Investment Checkup utilizes simplified charts and jargon-free explanations to ensure investors are always clear of how their portfolios are assessed. Finally, Investment Checkup not only provides personalized, fact-based advice, but also offers actionable steps for investors to immediately take to ensure a more efficiently-allocated portfolio.

With Investment Checkup, investors will now have the tools to actively manage their investment strategy and reach their long-term investment goals by making their portfolios work harder for them.

About Personal Capital. Developed by a team of high-tech and finance veterans led by Bill Harris, former CEO of Intuit and PayPal, Personal Capital offers the nation’s first digital wealth management service. It combines a free financial dashboard to gather and analyze all your financial data, with a financial advisor to help manage your investments. Personal Capital’s award-winning service is available at or 855-855-8005, and its mobile and tablet apps are available at the Apple App Store and the Google Play Store.


The Investment Checkup is intended to provide insight based on the accounts you have aggregated on the Personal Capital dashboard and other information you have provided. Because there is no way to know all information about your finances or your personal situation, comments or analysis may be incomplete or inaccurate. All insight provided represents a courtesy extended to you for educational purpose and you should not rely on this information as the primary basis of your investment, financial, or tax planning decisions. You should consult your legal or tax professional regarding your specific situation.

Past performance is not a guarantee of future return, nor is it necessarily indicative of future performance. Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Comparative analysis, including Monte Carlo analysis, is intended to illustrate hypothetical performance of various allocation strategies based on a long-term historical asset class performance and is not meant to imply actual performance or results. Much of the analysis does not include taxes or fees, which can have a material impact. It is not possible to invest directly in an index without incurring expenses, which will lower the actual return.

Investment Checkup includes content supplied by companies that are not affiliated with Personal Capital. Please refer to Investment Checkup FAQ for additional information, including data sources.

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Serena Bartolucci

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