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Calculating investment performance (not IRR)

Has anyone found a way to use an exisitng report as the basis (since apparently and disappointingly Quicken can't do it) to calculate total return? The IRR is extremely misleading, especially if you have idle cash sitting in your accounts.

I basically want the difference between beg val + additions - withdrawals + div + interest - margin interest (optional) and the end value. Obviously these can be had from various reports. I thought the investing report would work, but it includes purchases and sales in the addition/withdrawal section which I think is incorrect.

It is telling me over 3 years my IRR on one account is 56%. This is extremely misleading because, for example, if you make 10% on a stock in 1 week, the IRR on that is like 520%. If that cash sits in the avccount the rest of the year and does nothing, the real rate of return is actually 10%. That is what I want.

Reply to
michaeljc70
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Well, the portfolio gain must be set against beginning- portfolio-balance-plus-deposits-and-minus-withdrawals...but the problem is that (for instance) a large withdrawal on the last day of the year would spike a previously predictable return.

The solution is a Modified Dietz...

That's just the portfolio gain set against the beginning-portfolio-balance-plus-an-averaged-daily-deposit/withdrawal-net...

An IRR ? Well, put that in your flashing neon feature matrix...The IRR is not helpful for securities held less than a year but no report of result is also not helpful...

Reply to
A Count

As an example, I took quicken and created an investment account. I tried to different scenarios with only the trade date changing. I started with 100 in a brokerage account on 8/1/2004.

Scenario 1: Bought 10 shares stock X on 8/1/2004 for $10. Sold for $12 on 8/15/2004

Scenario 2: Bought 10 shares stock X on 8/1/2004 for $10. Sold for $12 on 8/1/2005.

Quicken caluclates the Avg Ann Return as 337% for scenario 1 and 20% for scenario 2!

Of course, I realize why. However, this is useless. In my mind (and in every sensible investor's mind), the returns should be the same. I started with the same amount and ended with the same amount. Returns should be the same. In scenario 1 cash sat idlea for almost a year dragging down the return if Quicken calcaulated returns properly.

Reply to
michaeljc70

I've said it many times: Quicken's return stats are unreliable and confusing. They should not be used for investment decisions.

Reply to
Stubby

Well, the calculation that I do is YTD but defines the period as the entire calendar year...so each YTD result is as projected to year end.

For Scenario 1, I get 48.03% if the cash deposit for the security purchase is on 8/1/2004...

For Scenario 1, I get 20.05% if the cash deposit for the security purchase is on 1/1/2004...

Reply to
A Count

For Scenario 1, I get 20.00% if the cash deposit for the security purchase is on 12/31/03...

Reply to
A Count

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