I'm a developer and was thinking of building something like this using the API to a few brokerages. So the idea is the tool would allow you to define criteria for your index(market cap, industry, p/e and p/b, etc) and form it, then allow you to make adjustments as needed.
From there, the tool would keep track of how you portfolio deviates from the index, and what actions(buy/sell) are needed to track the index(or your version of the index).
This would address a number of issues with Index funds:
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Dividends would hit your account when they are paid, rather than quarterly from the ETF, allowing them to be reinvested sooner
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You can exclude companies you don't like, either for fundamental or moral reasons(ie maybe you want a high dividend index, but want to exclude Philip Morris because you don't want to profit off of tobacco).
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You can exercise tax loss harvesting by selling losing stocks, which isn't possible with an index
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Because you own the stock directly, you don't have to worry about a huge tax bill or time out of the market if the index fund decides to close down.
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Mutual funds and ETFs do not grant you voting rights to the shares they hold for you, but if you buy directly, you do have rights.
Submitted January 05, 2022 at 10:33AM by skilliard7 https://ift.tt/3G1QNQK
