Avg Ann Return - calc

I've never been able to understand the Quicken calcs... Just looked at one Report - Investment Annual Rate of Return.

SO - reported from 5/2013 to 5/2014 for one example mutual fund - Begin Invest = $61k Bought = $8k Ending Invest = $69k

Market Value = $88k Quicken Avg Ann Return = 30%

How do you get 30% from those numbers ?

Reply to
ps56k
Loading thread data ...

If you bought the $8k late in the period, you really had $61k that grew to $80k (the added $8k at the end making up the $88k total). That 80/61 is a 31.1% return.

On the other hand, if you had bought the $8k worth early in the period, you really had $69k growing to $88k = 27.5% return.

Quicken considers when you actually did buy the added shares. That was apparently toward the later part of the period. Your values were made easier because you covered exactly a 1 year period.

Reply to
Tod

yup - they additional funds were added toward the very end of the 1yr period.

-------- Avg Annual Rate of Return.

SO - created Perf Last 12mo report from 5/2013 to 5/2014 and looking at one example mutual fund - Begin Invest = $61k Bought = $8k Ending Invest = $69k

Market Value = $88k Quicken Avg Ann Return = 30%

How do you get 30% from those numbers ?

Here's another one - from an IRA I just setup.... Begin = $0 Add = $4,500 Ending = $4,500 Market = $4,576 Avg Ann Return = 26%

-----------

tnx - yes, these were all involving recent mutual fund additions for 2014. and the Quicken report was -

Investment Performace with a data range of - Last 12 months -

First example - Begin 5/5/13 End 5/4/14 - the $8k was added 3/3/14

Second example - Begin 5/5/13 End 5/4/14 - the $4,500 was used to create the IRA on 4/7/14

Would just like the pointers to replicate the Quicken calcs of 30% and 26%

Reply to
ps56k

yes, bought at the end of the period, SO, how do you get from the $61 --> $80 giving an answer of 31.1% Is that merely 80 / 61 = "one" plus 31.1%

Reply to
ps56k

Yep. When there are not other 'in and out' transactions, that is what it c omes down to. The actual formula can be seen in Quicken's help file and th ere are Excel add-in function to replicate the calc as well. Likewise 88/6

9 - 1 = 27.5%. Note that it does not matter how the value varied during the interval (provided no adds or withdrawals using those intermediate valu es). Only the endpoints are relevant.

Now if you have regular (or irregular) additions and subtractions, the math gets much more complicated.

Reply to
Tod

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.