IRR for investment performance?

I have been using the Quicken Internal Rate of Return as a quick and easy judge of investment performance for my portfolio. I actually have recalculated it for one account in Excel in order to understand the inner workings. There is an obvious skewing when you don't own a security for more than one year but I wonder how other people analyze their investment performance.

Reply to
Mr.Jan
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It would seem that what you have done is verify the internal rate of return calculation.

For IRR, it has an inherent assumption that you have held the stock for one year. I think if you look at a stock that doubled over a year vs a stock that you bought a month ago and it doubled, it will not compare them accurately. I could be wrong. I will check later but I was looking to see if anyone used a different method. You seem to be using the same but in an excel spreadsheet. No?

Reply to
Mr.Jan

I prefer the irroflife.com ;)

Reply to
Olivier Wagner

To an extend the MIRR - modified IRR solves some of the issues with IRR by allowing finding a rate of return that ensures that proceeds from an invest ment is reinvested at a different rate than the rate at which costs are fin anced

MIRR itself has a limitation as it assumes that investment is held till its maturity however that may not always be the case. The HRR - horizon rate o f return solves the issues with both IRR and MIRR by allowing you to find t he return up till a horizon that lies anywhere from commencement of investm ent till its maturity thus

Ti

Reply to
abethefinancialengineer

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