Using a software package to select, track, and manage your investments can be a great help to most investors but with so many software packages available and all sorts of confusing claims from producers, choosing the right investment software can be an extremely difficult decision.

Below we outline what investment software can do for you, the types of packages available, and provides some tips to help you find the right package for your needs.

There are many different investment styles, but successful investors share a few common characteristics – they are disciplined, organised and can remove their emotions from the investing process. Having the right tools at your disposal will help you acquire these characteristics, and one of the most important tools is the right investment software package.

What will it do?

Investment software can help improve your investing by:


Top Australian Brokers


# Organising your trading – Portfolio management software will let you monitor your portfolio and prepare reports for your accountant.

# Presenting complex information visually – Humans process information better through images than streams of facts and figures. Charting software displays share price data in charts to help you easily see trends, areas of support and resistance, and allows you to gauge whether a stock is overbought or oversold.

# Testing and implementing a trading plan – Disciplined trading requires you to set rules about when to enter and exit the market, and how much money to commit to each trade. Investment software will help you build and test your trading plan to manage this process, and take the emotion out of trading.

# Saving you time – Scanning tools let you scan over 1500 stocks on the ASX for investment opportunities based on your fundamental (financial) or technical criteria.

Don’t touch the blackbox

As the name suggests, ‘toolbox’ software allows you to construct your own trading plan using your own criteria.

Some other companies promote expensive trading systems or software based on proprietary systems which claim to deliver massive returns in only a few minutes per week. These are called ‘blackbox’ systems and in the opinion of many investment heavyweights, usually do not justify their price tags. Markets continually change, and no system will consistently work across all markets or for all personalities.

Our advice is, rather than looking for the magic solution, spend your time and much less money to educate yourself and stgelop a trading plan suited to your own personality and investment requirements.

Which software is right for you?

Of course which package you choose is going to depend on what you need it to do. Our experience in selling a wide range of investment software has enabled us to put together the following guide to point you in the right direction.

Step 1 – Decide which features you need

Software programs can offer hundreds of different features so we start by looking at the key components:

# Portfolio Manager: Provides the ability to record your buy and sell transactions, brokerage and dividends. This allows you to monitor the performance of your portfolio throughout the year, and report accurately to your accountant at tax time.

# Charting/Technical Analysis Software: Displays historical share price data and indicators in a graphical format. This allows you to see emerging trends and price patterns, support and resistance levels and overlay indicators on a chart. These indicators are particularly useful for short to medium term traders looking to time their entry into the market.

# Scanning Software: Quickly scans the entire sharemarket using your stock selection criteria to find possible trading opportunities. May use one or both of fundamental (financial) or technical (price and volume analysis) criteria to find stocks.

# Fundamental Analysis Software: Gives easy access to reported company financial data. Provides tools to compare and analyse individual companies against their peers, in order to highlight good investment opportunities.

Step 2 – How experienced are you and what is your investing style?

One size does not fit all with investment software. To find the package best suited to your needs now and in the near future, you will need to consider your experience and style of investing. We classify software accounting to an investor’s experience levels:

# Beginner: You have a basic understanding of the stockmarket and are looking for a tool to more easily display information and organise your trading.

# Intermediate: You have been educating yourself and trading for a reasonable period of time. You have a trading plan which incorporates a consistent strategy to enter and exit trades, and manage risk for each trade.

# Advanced: You have a detailed understanding of trading, and a rigorously tested trading system which you have back-tested against many different types of markets and use consistently to make trades. Some of the advanced features you may be looking for include customised scans and build-your-own indicators.

The vast majority of investors fit into either the beginner or intermediate experience categories, and should not be fooled into thinking that they need all the bells and whistles of the complex and expensive packages available.

And style of investing:

# Passive Investor: You typically buy and hold shares for periods of 6 months or longer and look for stronger returns than bank interest. You don’t have the time or desire to get too involved and typically make decisions in consultation with a financial advisor.

# Active Trader: You typically buy and sell shares within a 1 day to 6 month period. You actively monitor and adjust your portfolio and aim to generate a significant income from trading.

# Day Trader: You typically buy and sell shares either on the same day or within 2-3 days. You spend a significant proportion of your day in front of a computer screen, and make revenue through small profits on large numbers of trades.

Step 3 – And what else do I need?

# ASX Data Feed: To use any investment software, you will need a data feed. These come in a number of formats including historical data, end-of-day data, snapshots, real-time data, and fundamental data.

# Subscription Fees: Some software providers charge an annual subscription fee for software upgrades, tailored data services, technical support and other services.

Step 4 – Pick your package

The following table was created from a critical assessment of the strengths of each package using the criteria above.

* Quoted prices are current at 14 August 2009 (Australian dollars including GST unless otherwise indicated) and are based on packages available from which include 12 months data.