Identify Overlap with Scottrade Portfolio Review Tool
With Scottrade Portfolio Review Tool, you can examine the top 10 holdings of each of your funds and see how they're weighted according to your allocation. Perhaps more importantly, Portfolio Review Tool also allows you to build a hypothetical portfolio and then test the diversification of that portfolio before you implement any changes to your real portfolio. During this testing process, you can use the Portfolio Concentration table to expose overlap that exists in your real or hypothetical portfolios.
So what exactly will you find using the Portfolio Concentration table? If the funds in your real or hypothetical portfolio hold any of the same stocks you already have in your portfolio, you'll likely see higher weightings in those stocks than you expect or want based on your allocation strategy.
You can use this information to shift how you plan on investing new money, or reallocate your current portfolio, to match your planned allocation strategy.
Remember that all asset allocation tools have limitations, and you'll need to consider those limitations while you're analyzing your portfolio. For more information about the limitations of asset allocation tools, refer back to the Using Scottrade Portfolio Review Tool's Asset Allocation Tools article.
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The analytical tools described in this article are for information purposes only and their use does not guarantee a profit. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security. Investors should fully research any security before making an investment decision.