How do you calculate your portfolio performance?

[Surfdaddy]

I'm still about 2 yrs from RE, and I'm using Excel to track my portfolio.

I comingle both short term funds and longer term cash, and I account for the short term cash as a line item in my spreadsheet. For example,

If I have $1M, and I want 65% stocks, 30% bonds, and 5% cash (as a hypothetical):

I'd have $650K stock
$300K bonds
$50K cash

...but I also have, say, $30K in short term cash, because I'm going to buy a new car soon. I'm not counting the $30K as part of my *retirement* portfolio. But I keep the $30K in my MM acct because it gives me the best short term interest. So I have $80K in my MM acct.

So to track overall *retirement* portfolio performance, I need to somehow not account for the interest I earn on the short-term $30K. To make things even more complex, I am adding to savings regularly. I also get periodic dividend payouts from certain stocks I own, which go into the MM account.

I can *approximate* my portfolio performance, but some of you are posting *daily* performance numbers! I'm just wondering about clever ways you do your numbers. Are you using MS Money, Quicken, etc.? A spreadsheet? Online portfolio site? etc.

 

[sgeeeee]

I use MS Money. I don't like everything about it, but several years ago it came free on one of my computers so I started using it. Now I keep using it because it's easier than changing and I've never heard a compelling reason to change.

 

[SteveR]

Almost all my stash is on-line somewhere and I let them do the work from me. I download to Money and let it do the heavy lifting to come up with a combined number.

 

[Ed_The_Gypsy]

I think you want a Discounted Cash Flow (DCF) calculation. I don't know if Excel can do that out of the box, but it could be programmed to do so. (I have been too lazy to attempt it. John Galt's back-of-the-envelope has always been good enough for me.) A DCF analysis takes into account how much and when money comes in and goes out and applies an ROI iteratively until the calculated present value matches your present value.

 

[BUM]

I also use Excel and a home-brew net worth spreadsheet which I update a few times per year.

Just because I can't help it, I also track (an Excel chart) my portfolio balance and the DJIA. This I do a few times per month. As I become more diversified there is less correlation between the two... and so far thats been a good thing!

 

[Spanky]

To calculate IRR and YTD, I use the spreedsheet by Gummy.
http://gummy-stuff.org/YTD.htm

 

[ladelfina]

There is an XIRR function (Internal Rate of Return) in Excel which was even easy for a non-financial-person like me to set up. I did it just recently as a trial to test Quicken's numbers for IRR (they did come out the same).

The equation is this:
=XIRR(M42:M71, A42:A71)

In my case M42 was the starting value, M71 was the ending value, and everything in between was dividends (positive), buys and reinvestments (negative). The A42:A71 array is made up of the corresponding dates.

I like doing it myself in Excel 'cause there's the opportunity to save it and go back and look at it again.

 

[cute fuzzy bunny]

All my money is at vanguard.

Every day I look at the total.

If its higher, I'm up.

If its lower, i'm down.

I know roughly where I started at the beginning of each year

I dont separate earnings from growth from dividends from spending. It is what it is. I'm gaining ground or losing ground.

So far, year on year, gaining ground. In some years, spectacularly.

Sorry for the low-tech, low-brow approach.

 

[ladelfina]

I just started looking into it because the numbers that everyone bandies about seemed "not right" to me. I used to check my online 'performance' only rarely but there were always these low numbers staring me in the face. When I entered everything into Quicken and did their IRR report, obviously the numbers were more in line with what I wanted/expected to see. Now I have come to realize that 90% of the chatter about "stock market returns" is 100% about price appreciation; still, it's hard to tune out. I wanted to look at real numbers so as to decide what to do about stocks that a.) I knew very little about and b.) I had buy prices for and current value, but had been unclear on what each one really doing for me.. Conventional online 'performance' calculations were not useful in this, showing laggards as being possibly decent and dividend performers as dogs.

 

[2B]

I used to have an "investment advisor" that did it for me.  After awhile, it became obvious he was beating the market with poor math skills or worse.  That was a long, long time ago.  Even thinking about it brings back horrible flashbacks of how much money that bozo cost me.

When I started on my own, I calculated it by hand.  The birth of the spreadsheet simplified things and I used Excel for a few years.  Now I use Quicken.  My only regrets are that I didn't put my 401k into it until 2002 and I "backed up" every year until 1998.  Backing up effectively destroys your data continuity.  Not having my 401k in the calculation took a major portion of my assets out of the analysis.

Quicken is perfect.  I have a saved report that only looks at my "investment" accounts.  My day-to-day checking, "escrow" savings and emergency funds are not included.  I also use Quicken to look at our budget and spending patterns.  I really wish I had started using all of its features sooner and kept the data active.

 

[ladelfina]

2B, if you go over to the Quicken forums, unfortunately you will find a lot of folks complaining about data corruption and running up against (officially) undocumented internal Quicken DB limitations. Number of transactions? Overall file size? Number of quotes? Will deleting the quote prices in Quicken actually free up space or is it an illusion? A lot of questions and no clear answers -- par for the course from Intuit.

You are right to do yearly backups (from a copy of your main file), but I would try keeping the main Quicken file going as long as you can. Don't know if it's worth your time setting up a master 'test' file, trying to suck back in all the xactions from past years and seeing what happens.. Good luck!

 

[Eagle43]

All my money is at vanguard.

Every day I look at the total.

If its higher, I'm up.

If its lower, i'm down.

I know roughly where I started at the beginning of each year

I dont separate earnings from growth from dividends from spending.  It is what it is.  I'm gaining ground or losing ground.

So far, year on year, gaining ground.  In some years, spectacularly.

Sorry for the low-tech, low-brow approach.

Exactly, with one exception.  I don't look at the total every day.

 

[unclemick]

Nope - not much anymore. I read the stuff Vanguard sends me. About once a year I check the current yield on my individual stocks.

However - I do check current yield on my mutual funds fairly often. And I'm prone to review my individual stocks when I have some loose cash to add to the pile - buy more existing or something new.

I tend to watch the overall market(yahoo finance).

Early on in ER - I watched more often. Now at 62 - I'm a little more relaxed or old(13 ER years) or something, And balanced index rebalances itself.

heh heh heh

 

[bpp]

I use Excel and XIRR. But for day-to-day stuff, just track a subset of my portfolio in Yahoo!.

Bpp