Portfolio tracking in a spreadsheet

Luum exists because a spreadsheet stopped being enough. That is a genuine origin story rather than a marketing device, and it means this article is written by someone who maintained one for years and still thinks it is underrated.

A spreadsheet is the right tool for longer than most software companies would like you to believe. It is free, it handles any account type and any asset, and it encodes exactly the rules you decide matter. Plenty of people should not replace theirs.

What follows is where it actually breaks, not where it becomes tedious, but where it starts producing numbers that are wrong without telling you.

What a spreadsheet does well

Arbitrary assets. Private company shares, a rental property, a defined-benefit pension estimate, precious metals in a safe. No aggregation tool will cover all of these, and a spreadsheet does not care.

Rules you choose. If you want to value something a particular way, or exclude a category from your allocation, you write it. No product decides for you.

Total transparency. Every number has a visible formula. Nothing is computed somewhere you cannot inspect, which is more than can be said for most tools, including ours.

Durability. A CSV export will open in fifty years. Products get discontinued.

Where it breaks, in order of severity

1. Adjusted cost base across accounts

This is the one that costs money.

Canada pools identical securities across all your non-registered accounts into a single average cost. Maintaining that pool by hand requires you to correctly record every buy, every partial sale, every reinvested distribution, and every return-of-capital adjustment, across every institution, in the right order.

The failure mode is not that the formula breaks. It is that a T3 arrives in March with a box 42 amount, you are busy, and you do not go back and reduce the cost base. Nothing looks wrong. The error compounds silently for years and surfaces the year you sell.

2. Silent staleness

A spreadsheet does not know it is out of date. If you skipped entering a dividend in August, every figure derived from it, return, income, yield, allocation, is quietly wrong, and the sheet looks exactly as confident as it did when it was right.

Products that sync have a different failure mode: they break loudly, or they show you a stale-data warning. A spreadsheet's errors are always silent, which makes them harder to catch than more frequent but visible ones.

3. Returns that account for contribution timing

Computing a simple return is easy. Computing a time-weighted return properly means splitting your history at every cash flow, computing each sub-period, and chaining them.

It is doable in a spreadsheet. It is also the single most common place where people's formulas are subtly wrong, usually by treating a contribution as a gain, which inflates the result. If your spreadsheet has ever told you that you beat the index in a year you contributed heavily, this is the first thing to check.

4. Look-through and overlap

Knowing you hold 40% in two ETFs is easy. Knowing what those two ETFs both hold, and therefore what your actual concentration in any single company is, requires holdings data for each fund, refreshed as it changes.

There is no reasonable manual approach to this. It is simply outside what a spreadsheet can do without a data feed.

How to know you have hit the wall

Three reasonably objective signals:

• You have the same security in more than one non-registered account. Your ACB is now a cross-account calculation and the risk of getting it wrong has stepped up sharply.
• You have received a T3 with an amount in box 42 and are not certain you adjusted for it. Return of capital is the most commonly missed adjustment in Canadian investing.
• Reconciling takes more than an hour a quarter, or you have started skipping it. Skipped reconciliation is when the numbers begin to drift.

If one or more do apply, Luum vs your spreadsheet sets the two side by side, including the rows where the spreadsheet is still the better answer.

If none of those apply, your spreadsheet is fine and you can stop reading.

If you keep the spreadsheet

Record trades at the transaction level, not as monthly balances. Balances cannot reconstruct a cost base.

Keep a separate tab for distributions with the T3 box numbers, and reconcile it in March when slips arrive rather than in December.

Record the account against every transaction. A pooled ACB calculation needs to know which transactions were non-registered.

Export a CSV backup each year. A spreadsheet you cannot open is worth nothing, and whichever tool you eventually move to will want that history. Any tool worth moving to should let you take it back out again. Luum's own data export is there for the same reason.

And if your spreadsheet and another tool disagree about what your portfolio returned, they may both be right, time-weighted, money-weighted and simple returns measure different things.

If you decide the spreadsheet has stopped being enough, portfolio trackers in Canada, compared covers the alternatives, including the cases where something other than Luum is the better answer. And if the terminology on your statements is part of the problem, portfolio and tax terms, defined is the short version.

Common questions

When does a spreadsheet stop being enough?

At the points where the arithmetic stops being arithmetic you chose and starts being arithmetic a rule dictates: pooling cost base across accounts, handling return of capital, computing a return that survives deposits and withdrawals, and keeping prices current. A spreadsheet does none of those wrongly so much as silently.

Can a spreadsheet track adjusted cost base correctly?

It can, and many do. What breaks is not the formula but the maintenance: every corporate action, distribution and transfer has to be entered by hand, and the failure mode is a missing row rather than a visible error, so the sheet keeps reconciling against itself.

Can I keep my spreadsheet and use a tracker as well?

Yes, and it is a reasonable way to start. The spreadsheet remains the record you understand while the tracker gives you a second, independently computed figure. Two numbers that agree are worth more than one number you cannot check.