Tracking portfolio performance

[Laxputs]

I currently have my portfolio tracking in Google finance. Also, in my RBC directing investing account.

 

How can I see yearly/monthly performance taking into account shares bought and sold at different times, and how the performance would compare to an index? I don't think google has very good performance related analysis. And the RBC version offers no other data but a graph and I question its accuracy.  What's the best out there? Is there a way to import easily?

 

Thanks.

[Hielko]

the only thing you need to calculate your performance is starting value, ending value and cash in and out flows. So that should be pretty easy to track.

[Laxputs]

Thanks. Also, wouldn't we need to make purchases of the index, whenever I make purchases of the stocks, to keep the comparison accurate?  How do I account for purchases not bought on Jan 1, for the year in review?

 

[racemize]

Thanks. Also, wouldn't we need to make purchases of the index, whenever I make purchases of the stocks, to keep the comparison accurate?  How do I account for purchases not bought on Jan 1, for the year in review?

 

I generally don't believe in comparing to the index using purchases at the same date.  My reasoning is as follows:

 

1) I'm comparing my investing ability to what I would be able to get if I just bought the index;

2) If I just bought the index, I would not be buying or selling at disparate times--I'd either just buy and hold the index, or dollar cost average;

3) Accordingly, the buying and selling that I do in my investment portfolio is part of my "skill" (or negative skill, as the case may be), and so I do not pretend as though my indexing counterpart would have made buys or sells at the same time.

 

Moreover, it is also a PITA.  Comparing to TR seems easier and representative.  Comparing to dollar cost averaging would be the other alternative, but I don't want to deal with the calculations/upkeep.

[Laxputs]

Does anyone have a spreadsheet made up they can send? Something that calculates the time adjusted return of buying a stock at mid-year, etc., and how that affects the relative portfolio performance? If not, favourite web-based application?  And the inputs have to be both time adjusted and weight adjusted to total portfolio size, correct?

[EliG]

Does anyone have a spreadsheet made up they can send? Something that calculates the time adjusted return of buying a stock at mid-year, etc., and how that affects the relative portfolio performance? If not, favourite web-based application?  And the inputs have to be both time adjusted and weight adjusted to total portfolio size, correct?

 

Google "XIRR tutorial". It's easy to build a spreadsheet that suits your personal taste. Excel, OpenOffice and Google all support XIRR.

[Laxputs]

Ok, thanks. If anyone has one kicking around that is good and wants to share, I'd appreciate the time save.

[infinitee00]

Here is something I shared a while back and have used for a while. I also track using XIRR method mentioned above. They pretty much line up..but I have continued to use both.

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/2012-returns/msg97835/#msg97835

[Laxputs]

Thanks very much. I will look into it. One thing, suppose I add cash to buy a stock at half way through the year. When calculating the calendar year performance, does the return on that buy need to be annualized somehow?

 

Much obliged.

[rayfinkle]

I solved this issue--cash deposits/withdrawals by creating an artificial share count for my portfolio. This way if can "issue shares" at nav for deposits to get a pretty decent proxy for my irr. This should be comparable to a benchmark plus or minus a bit of time lag. Fwiw this nicely approximates my account performance as summarized in my fidelity reports.

[writser]

Thanks very much. I will look into it. One thing, suppose I add cash to buy a stock at half way through the year. When calculating the calendar year performance, does the return on that buy need to be annualized somehow?

 

Much obliged.

 

You can treat your portfolio value at the start of the measuring period as a cash inflow, the end value as a cash outflow. Also treat all intermediate deposits / withdrawals as cash in- and outflows. Then use the XIRR function in excel / google docs to calculate the IRR of your portfolio. It will take into account everything.

 

I made a simple example to demonstrate it: link. Should work the same way in Excel.

[Laxputs]

Wow, XIRR is sick :)

Thanks so much.