How to Set up a Target Portfolio
Before we get into creating a model portfolio. We should first explain what a model portfolio is.
A model portfolio is a percentage breakdown of the ETFs and/or stocks that make up a portfolio. Having a model portfolio is the first step to maintaining a balanced portfolio. After-all if there's no model portfolio, then there's no way to keep it balanced.
Because Passiv is software for DIY investors, users must define what their portfolio will be made up of and assign percentages to each holding in it.
Once you set up your model portfolio, you'll be shown what actions you need to take to get as close to your target portfolio as possible. This closeness is reflected and measured by the "accuracy" metric which appears above the target portfolio and on the dashboard for each target portfolio.
In this article, we'll review the ways you can create model portfolios in Passiv.
When you create a new portfolio in Passiv or link your account for the first time, you will need to set up a target for this portfolio for Passiv to be able to display the trades needed to keep it balanced. In your Dashboard, portfolios that don’t have a target allocation will have a Setup button appear to their right. Click on the Setup button to get started.
You have three options to setup a target portfolio:
Option 1: Import your current holdings as your model portfolio
This is ideal for someone who is already investing, as it saves you the trouble of having to build it manually. Don't forget to verify or adjust the percentages for each asset in your target portfolio when you import it.
Click on the Import button. Passiv will sync with your brokerage to bring your current holdings as your target portfolio.
Option 2: Build your model portfolio manually
If you aren't already investing and are just holding cash in your account, then you can opt to build your portfolio manually.
Click on the New Model button.
Search a security in the search box and select the one you would like to have in your portfolio, then allocate a target percentage for this security in your portfolio.
When you have all the securities you want with a percentage allocation in your portfolio, click Save Changes.
Option 3: Use one of your existing models for this portfolio
If you already have a model portfolio saved, you can apply it to multiple portfolios.
Click on Models.
Select the model you want to apply and click Apply Model.
Please note: If you purchase assets in your brokerage account which aren't part of your target portfolio in Passiv, it will throw off your accuracy. So be sure to return to Passiv to add or exclude them from your target portfolio.
Once you set up your target portfolio, you can always go back and click Edit Model to modify your model portfolio.
Go to the Overview page of the portfolio you want to modify. Scroll down and click Edit Model -- then adjust the percentages of your assets.
When you are done click Save Changes.