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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 01:34 PM   #21
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Re: Total Portfolio ROI - January 2007

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Originally Posted by JustCurious
Retire@40, please understand that an "annualized" rate of return is a fiction. It assumes that the return for the rest of the year will be at exactly the same rate as it was in January, and this will not happen. So asking someone for their annualized rate of return in January is really quite meaningless.
I don't think it's meaningless, but I realize this early in the game it doesn't mean as much as it would in the 11th month.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 01:43 PM   #22
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Animorph
My best fund was Wasatch International Opportunities Fund up 53.45% annualized.
So is the YTD amount below an annualized rate or not? If it is, it's reporting much lower return than you are.

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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 01:49 PM   #23
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Re: Total Portfolio ROI - January 2007

The year to date from Yahoo is not annualized. It is just the simple return. My portfolio equivalent was the 0.68% number. I suspect that's what most of the numbers discussed here really are. In which case, I'm doing much worse than everyone else!

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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 02:52 PM   #24
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Re: Total Portfolio ROI - January 2007

I recommend that we always used annualized numbers when reporting returns on this forum, and also say that they are annualized.

My annualized return for Jan was 12.97% for a very boring 60/40 with much of the equities in the 500 index and total stock market index.

What a great market we've had this last year -- shouldn't take it for granted!
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 03:09 PM   #25
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Re: Total Portfolio ROI - January 2007

From my experience and from a number of articles that I have read on the subject, leads me to believe that doing calculations monthly can often be counterproductive to a long term portfolio as it may move you to make trades that try to adjust your stash, but only on a very short term window (1 month). I only calculate my returns annually so that I get to view it with a more time-adjusted span (12 months+). That said, if I were calculate my numbers on a monthly basis, I would probably not make any more trades than I do.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 03:17 PM   #26
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Cut-Throat
No! - A.P.R. is the benchmark! - Whether you are talking about 1 month, 6 months, 1 year or 10 years!

It's all fiction - It's an average - And that is what it is supposed to be!
Annualized returns only have meaning for historical returns over periods greater than one year. They serve to create apples to apples comparisons. However, they have little or no meaning when you take one month and try to extrapolate an entire year.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 03:27 PM   #27
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Re: Total Portfolio ROI - January 2007

I would tend to agree.

On the other hand, I'm pretty jazzed about my 37.2 annualized return for the coming year.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 03:35 PM   #28
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Re: Total Portfolio ROI - January 2007

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Originally Posted by retire@40
I've got a 67/33 split. The S & P 500 only returned 1.50% (annualized) in January.
The S&P 500 returned 1.5% (unannualized) in January. Annualized that would be 18%. But I agree with JustCurious - taking a one-month performance and annualizing it is virtually meaningless.

edited to correct arithmetic mistake: 12 x 1.5 = 18 not 15
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 03:36 PM   #29
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Re: Total Portfolio ROI - January 2007

So I shouldnt run out and buy another new car?

Dang.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 03:39 PM   #30
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Cute Fuzzy Bunny
So I shouldnt run out and buy another new car?

Dang.
Not unless you are a (365 / N) man from way back!
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:14 PM   #31
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Re: Total Portfolio ROI - January 2007

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Originally Posted by FIRE'd@51
The S&P 500 returned 1.5% (unannualized) in January. Annualized that would be 15%.
Actually, that would be 18%.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:18 PM   #32
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Re: Total Portfolio ROI - January 2007

Maybe we should have separate threads for those who invest only in mutual funds (daily pricing) and those who invest in other assets (priced more frequently).

Then we "other assets" guys could check our returns minute-by-minute and annualize the numbers daily or even hourly. The mutual-fund guys could continue to report their annualized returns daily without feeling left out of the discussion. Everybody could plot the daily hourly microsecond frequent changes in their annualized numbers and draw various conclusions & ideas from them.

Or we could all just get ourselves a life and report our results back here on the first day of January, when the previous year's annual return won't have to be annualized.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:25 PM   #33
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Re: Total Portfolio ROI - January 2007

You really know how to suck all the fun out of a room...
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:28 PM   #34
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Nords
Or we could all just get ourselves a life and report our results back here on the first day of January, when the previous year's annual return won't have to be annualized.
My thoughts exactly!

I remember before it was the law that lenders could state their interest rate however they wanted. They would advertise rates of only 3% interest. If it was monthly it was in fact 36% APR

- Thereafter there were laws passed that sent the benchmark at A.P.R. - Meaningless or not, it is the only way to compare rates!
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:34 PM   #35
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Cut-Throat
My thoughts exactly!

I remember before it was the law that lenders could state their interest rate however they wanted. They would advertise rates of only 3% interest. If it was monthly it was in fact 36% APR

- Thereafter there were laws passed that sent the benchmark at A.P.R. - Meaningless or not, it is the only way to compare rates!
Cut-Throat, you are not making a fair comparison. A.P.R. and annualized return are two entirely different things. A.P.R. refers to the interest rate to be paid for borrowed money, which is fixed by contract over a given period of time, whereas annualized return of 2007 based on only January's return is nothing more than wild speculation.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:40 PM   #36
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Cute Fuzzy Bunny
You really know how to suck all the fun out of a room...
I'm a trained professional:

"OK, guys, listen up. I know the last two weeks have been hard and we have another three weeks of 16-hour days before we're ready for the inspection. However the good news is that the watchstanders have just extinguished the bilge fire. As soon as they sort out the electric-plant grounds we hope to have the lights and the ventilation fans back on so that we can stop sweating in the dark. In another half-hour or so we'll all be able to take off our air-breathing masks and start cleaning up back there. The OOD also says that the weather seems to be improving, so maybe we won't have to deal with these 20-degree rolls much longer. But since we're all sitting here on the mess decks watching the doc stitch up Jonesy, I'd like to take this opportunity to knock out some mandatory training on maintenance rules affecting reactor compartment containment and the operation of remotely-controlled isolation valves. Once we get through the definitions it should take about an hour... any questions before we start?"
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:41 PM   #37
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Re: Total Portfolio ROI - January 2007

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Originally Posted by JustCurious
Cut-Throat, you are not making a fair comparison. A.P.R. and annualized return are two entirely different things. A.P.R. refers to the interest rate to be paid for borrowed money, which is fixed by contract over a given period of time, whereas annualized return of 2007 based on only January's return is nothing more than wild speculation.
Well, we'll agree to disagree. - If you only own an investment for 1 month of the new year, as some have pointed out your annualized return is 12 times that.

And as Nords pointed out, talking about any returns at all for 1 month is ridiculous! I don't even think about returns for a month so I think this whole thread is nonsense. - But if you are going to talk about it, it only makes sense to talk about Annualized returns. - To talk about returns without factoring in time, is mindless. TIME is money!
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:44 PM   #38
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Re: Total Portfolio ROI - January 2007

Sorry but I drowned myself in bilge water right about the part where you said "In another half hour or so..."
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:45 PM   #39
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Re: Total Portfolio ROI - January 2007

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Originally Posted by Cut-Throat
And as Nords pointed out, talking about any returns at all for 1 month is ridiculous! I don't even think about returns for a month so I think this whole thread is nonsense. - But if you are going to talk about it, it only makes sense to talk about Annualized returns. - To talk about returns without factoring in time, is mindless. TIME is money!
I didn't realize that the test of whether a thread was nonsense was whether you agreed with it.

I agree that talking about returns without factoring in time is mindless. That's why it's important to talk about January returns as being ONE MONTH RETURNS, which, by the way, IS a measure of time.
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Re: Total Portfolio ROI - January 2007
Old 02-11-2007, 04:46 PM   #40
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Re: Total Portfolio ROI - January 2007

Hmmm...popcorns not going to cut it this time. I think i'll have to whip up some chex party mix...

Its only a matter of time before we start multiplying random numbers by 25.
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