The monitoring stage of InvestOps is where investors spend most of their time. This is where investors keep tabs on their positions, as well as the views that underly them.
The first input for this stage is the current investment view. The factors that this view is based on may change at any time, so it’s important to stay on top of them in case the view becomes invalidated.
The second input is the trade plan, or at least the part of the trade plan that defines exit and adjustment criteria.
The final input is the set of positions that express the view. It doesn’t really matter how those positions were arrived at since they need to be monitored all the same.
The tools used to monitor views are generally the same ones used to develop the views in the first place. These are things like market data, watchlists, news feeds, analyst reports, and other services. These sources tend to be second nature to investors. Just keep in mind that keeping a large quantity of views and positions can require a substantial amount of daily monitoring.
One of the most important things to monitor is the passage of time. Simply being a day closer to an earnings announcement or option expiration can be enough to necessitate an adjustment.
There are several alert services available to provide proactive notifications tailored to specific needs. These include alerts around news, market data, and even brokerage account positions. Sometimes these notifications raise breaking news, but sometimes they’re useful to have in place to remind about things like upcoming earnings or dividends. The main benefit of alert services is that they require little work to set up and then stay out of the way until they have something to share.
Investors often ask for advice on whether or not they should stay in their current position. The best way to answer this question is to ask yourself if you would enter the same position today. If you wouldn’t, then it’s time to consider an adjustment.
This stage can last indefinitely. The only interruptions occur when the positions need to be adjusted or closed, which could be due to a change in the view or other milestone, such as a target profit or corporate event. The output of this stage is a summary of the relevant changes to be evaluated in the adjustment stage.