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How do you calculate YTD return?
Old 09-10-2016, 05:25 PM   #1
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How do you calculate YTD return?

My Excel skills are pretty basic, but a while ago I created a spreadsheet of my assets and investments; it's fairly simple but works for me. It calculates my NW and AA and also tracks the changes in those amounts so I can see, e.g., NW changes. But since I'm still adding to my investments with new money earned (both tax-deferred and after-tax) & also reinvest dividends, I can't really tell how much of my NW changes come from new money vs. return on investments. Is there a simple way to do that? Or does it even matter as long as I see the bottom line?? (Some of you who post your YTD returns seem to indicate that the figure includes new money.) Just wondering how or if others keep track of this.
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Old 09-10-2016, 05:37 PM   #2
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I track annually:
* Investment return: CDs, equity, all sources
* Income (if any) minus expenses
* Gifts and one-off adjustments

I calculate all those annually, and record it.

It's quite easy to do for me - income is just from one source. Net worth is adding up all accounts. Most of my expenses come from two bank accounts. Investment return is adding up all fixed income + equity returns and dividends, all separate accounts.

I don't calculate to last comma, ballparks are fine. To see what is driving my net worth up (or down).

Takes me a few hours to do it annually, which I also use to decide on asset allocation adjustments, check up on my spending levels, and do a bit of house keeping - like reinvesting CDs that ended.
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Old 09-10-2016, 07:25 PM   #3
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I connected all my accounts to Personal Capital, which does that and a whole lot more, for free.
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Old 09-10-2016, 07:28 PM   #4
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Fidelity and Quicken do it for me.
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Old 09-10-2016, 07:42 PM   #5
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I've been using this gummy spreadsheet for years. Easy stuff.
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Old 09-10-2016, 07:50 PM   #6
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We only track our net worth and review it semi-annually, or quarterly if I feel ambitious. We compute NW with and without real estate since that is hard to get a good value on. I'm not competing with the overall market, just making sure we're on track to meet our needs. We have a mix of stocks, mutual funds, CDs and savings. I pay most attention to the company stocks to make sure they are fundamentally sound and adjust if needed. Funds are all indexed. Overall percent of return isn't that important to me, but we've done very well over time with our stock picks if growth of our NW is any indication.


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Old 09-10-2016, 07:58 PM   #7
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Portfolio is tracked using Quicken. I calculate both a personal return (IRR) and a time-weighted return on a quarterly basis in Excel. This requires accounting for the timing of all contributions and withdrawals.
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Old 09-10-2016, 09:52 PM   #8
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Try this one.

Investment Return Calculator: Measure your Portfolio's Performance
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Old 09-11-2016, 08:14 AM   #9
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FWIW, I found a good approximation in Excel to the moneychimp calculator result. Calculate the rate given the beginning balance, ending balance and net cash flows for the year two ways... one assuming the addition/withdrawal occurs at the beginning of the year and the other assuming it occurs at the end of the year and then average the two results.

=AVERAGE(RATE(1,x,-y,z,1),RATE(1,x,-y,z,0))

where x = cash flow (positive for net withdrawals, negative for net additions), y = beginning of year balance and z=current balance)

This returns a YTD return. If you want an annualized rate, substitute the portion of a year for the 1 in each formula... so for example, substitute 8/12 for the 1 in each formula to get an annualized return through the end of August.
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Old 09-11-2016, 08:23 AM   #10
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I connected all my accounts to Personal Capital, which does that and a whole lot more, for free.
+1 why spend hours with a spreadsheet. PC is simple and fast.
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Old 09-11-2016, 08:28 AM   #11
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I understand the interest in how is my selection doing compared to whatever but I found it to much of a PITA to do all of these technically accurate overall returns. For annual performance/situation I track current portfolio total against the previous year's ending total. The percentage difference goes up an down with market changes and withdrawals for expenses through the year. A cell shows the % increase/decrease year to date which is sufficient for my purposes. For each investment holding, I have a cell with a Google function showing percent gain/loss YTD which I take into account for selecting withdrawal sources and where to rebalance.

It will be interesting to see what sort of solutions we adopt to deal with this stuff as we age out and start needing help to avoid screw ups. I'm betting some of the creative types around here come up with interesting approaches, warning flags, and fail safes. I figure I can turn it over to my son in a pinch.
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Old 09-11-2016, 08:30 AM   #12
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(Present balance - starting balance) / starting balance.

This will get you the percentage gain including stock appreciation and reinvested dividends. If you are making additions and withdrawals it gets more complicated so just use the online estimates of return for your stock or fund.
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Old 09-11-2016, 10:39 AM   #13
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I don't calculate historical returns because it isn't actionable for me.

On a monthly basis I monitor the allocation to make sure it hasn't drifted out of balance. I also watch for unrealized losses in the taxable accounts -- although our basis is so low from the great 2008-09 TLH season that it would take very large drop to produce unrealized losses now.

Annually I look at the total, just to make sure it still makes sense in terms of funding our future.

The past is the past -- I can't do anything about it so I don't worry about it. Since we are in primarily index funds and low cost bond funds, past performance isn't going to change our investment strategy.
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Old 09-11-2016, 10:50 AM   #14
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Quote:
Originally Posted by lucky penny View Post
My Excel skills are pretty basic, but a while ago I created a spreadsheet of my assets and investments; it's fairly simple but works for me. It calculates my NW and AA and also tracks the changes in those amounts so I can see, e.g., NW changes. But since I'm still adding to my investments with new money earned (both tax-deferred and after-tax) & also reinvest dividends, I can't really tell how much of my NW changes come from new money vs. return on investments. Is there a simple way to do that? Or does it even matter as long as I see the bottom line?? (Some of you who post your YTD returns seem to indicate that the figure includes new money.) Just wondering how or if others keep track of this.
I keep monthly totals, by account, in a spreadsheet. I know the gain over previous month, and that includes new contributions and reinvested dividends. It is really all that matters to us--the total going up more than it goes down.

At the end of month I grab totals by investment fund, and watch that allocation does not get too crazy. This is useful in my 401K, as I use a toggle to see what the AA would be at end of year with new contributions to be made. That way I don't get crazy with re-balancing, since most can be accomplished with new contributions.

I keep all year-end totals by investment fund in same spreadsheet as above. On New years Day I measure the EOY vs previous year.

I post in the YTD thread for conversation. Now I just post my 401(k) accounts YTD, as the institutions give me this information with little effort required from me.

The inevitable challenge with online aggregation by a third party, is, "What will you do when they no longer give you this data?"
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Old 09-11-2016, 01:33 PM   #15
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I connected all my accounts to Personal Capital, which does that and a whole lot more, for free.
Thank you for this information. I set up PC long time ago, but I never looked at it much, but I just did.

I looked at my 401K account (which I had transfered a portion of to a Rollover IRA this year), but it doesn't seem to calculate the rate of return correctly, however. My 401K says my rate of return for the same time period is 5.339% while PC is saying it's 1.78%..... Other accounts I haven't transferred money out of seems to show the right numbers...
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Old 09-11-2016, 03:22 PM   #16
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Thank you for this information. I set up PC long time ago, but I never looked at it much, but I just did.

I looked at my 401K account (which I had transfered a portion of to a Rollover IRA this year), but it doesn't seem to calculate the rate of return correctly, however. My 401K says my rate of return for the same time period is 5.339% while PC is saying it's 1.78%..... Other accounts I haven't transferred money out of seems to show the right numbers...
Check the timeframes. PC is real time. My Fidelity account calculates return about a month behind.
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Old 09-11-2016, 04:52 PM   #17
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Check the timeframes. PC is real time. My Fidelity account calculates return about a month behind.
Yep, I matched the timeframe (1/1/2016 to 9/9/2016) for PC, which is identical to my 401K(non-Fidelity), and that's the number I reported in my last post - PC is off by a lot (>3.5%). I checked it again - It looks like it lost connection to my account in April and the rate of return graph is flat since then, although the grand total of the account is correct, so that may be why the number is off.

Fidelity numbers (1/1/2016-7/31/2016) match for my Rollover IRA and Roth IRA, but my after tax account is off by over 1% (PC thinks I have close to 10K less in my after tax account than I actually do.)

I still see PC as a beneficial tool, but it may not be 100% accurate.
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Old 09-11-2016, 04:56 PM   #18
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Yep, I matched the timeframe (1/1/2016 to 9/9/2016) for PC, which is identical to my 401K(non-Fidelity), and that's the number I reported in my last post - PC is off by a lot (>3.5%). I checked it again - It looks like it lost connection to my account in April and the rate of return graph is flat since then, although the grand total of the account is correct, so that may be why the number is off.

Fidelity numbers (1/1/2016-7/31/2016) match for my Rollover IRA and Roth IRA, but my after tax account is off by over 1% (PC thinks I have close to 10K less in my after tax account than I actually do.)

I still see PC as a beneficial tool, but it may not be 100% accurate.
Yep, I agree.
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Old 09-11-2016, 06:24 PM   #19
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I think it's generally agreed that the XIRR function in Excel results in the most accurate metric. But this requires that you keep track of every individual addition and withdrawal transaction by date for all your accounts. For us, this isn't too difficult because we are no longer contributing and the only withdrawals are periodic dividends from the taxable account. So, at most, two transactions per month, and these can be automatically downloaded from Fidelity to Excel.

Similar to what pb4uski posted, I also have my own Excel version of the moneychimp calculator, which only requires total YTD additions and withdrawals. This is slightly quicker than XIRR, but it assumes that all transactions occurred in a linear fashion. This works OK in our situation because, again, the dividends occur regularly and in roughly equal amounts. This is usually very close to the XIRR figure. If you have large non-periodic additions or withdrawals, this method will not be very accurate.

My favorite method, however, is to simply look up the YTD total return for each fund I own in Morningstar. This goes into the same spreadsheet where I track the portfolio. The spreadsheet mix-weights on current values for each fund and group of funds. I do similar mix weighting for yield, duration, and ER. We have 14 individual ETFs, so this takes a few minutes, and again, the result is very close to XIRR. The advantage with this method is that I can very quickly analyze which funds and groups of funds are contributing and which are lagging. I can also see the result with/without cash and real estate. Without a ton of extra work, the other methods only provide a figure for the total portfolio. This method won't work well if you've made significant changes to the portfolio during the year.
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Old 09-12-2016, 02:37 PM   #20
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=(current value-beginning of year value)/beginning of year value
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