Total Portfolio ROI - January 2007

[JustCurious]

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.

 

[cute fuzzy bunny]

I would tend to agree.

On the other hand, I'm pretty jazzed about my 37.2 annualized return for the coming year.

 

[FIRE'd@51]

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

 

[cute fuzzy bunny]

So I shouldnt run out and buy another new car?

Dang.

 

[FIRE'd@51]

So I shouldnt run out and buy another new car?

Dang.

Not unless you are a (365 / N) man from way back!

 

[JustCurious]

The S&P 500 returned 1.5% (unannualized) in January. Annualized that would be 15%.

Actually, that would be 18%.

 

[Nords]

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.

 

[cute fuzzy bunny]

You really know how to suck all the fun out of a room...

 

[Cut-Throat]

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!

 

[JustCurious]

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.

 

[Nords]

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?"

 

[Cut-Throat]

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!

 

[cute fuzzy bunny]

Sorry but I drowned myself in bilge water right about the part where you said "In another half hour or so..."

 

[JustCurious]

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.

 

[cute fuzzy bunny]

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.

 

[unclemick]

Hmmmm

2.82% current yield - Target Retirement 2015. Toss in my 15% div stocks and I start to push 3%. Soooo - what's this ROI thingy good for?

heh heh heh heh heh heh heh - I already have a bag of party mix open with an unopened box of Orville Reddenbacher Butter Flavor in reserve. Original flavor Fresca(designated watcher) to wash it down.

 

[Cut-Throat]

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.

Who needs to multiply by 25 when you can get an ultra safe 7.5% after age 70! - And you don't even believe in eating into principal!

Maybe just multiply that random number by 13 and party on!

 

[cute fuzzy bunny]

Watch out JustCurious...he's a moderator! He might mess you up!

If you arent careful, he might...accidentally delete his own account or something

 

[Cut-Throat]

Watch out JustCurious...he's a moderator! He might mess you up!

If you arent careful, he might...accidentally delete his own account or something

For a Mensa guy, I thought you would come up with something better than this. Pretty lame.

 

[cute fuzzy bunny]

Actually, I wasnt ever a member, although they wanted me something fierce.

By the way, the crap that works on johnny doesnt work as well on me...

 

[eridanus]

If you start on 1/1/07 with $100k and end with $101k on 1/31/07, you'd have a return of 1% for the month. Annualized, that's 12.7%, unless you're withdrawing your gains each month (1.01^12 = 1.1268). A 1.5% gain for January would mean a 19.6% annualized gain.


Just throwing more numbers into the thread.

 

[73ss454]

What would a -2% in Feb do to the results. Don't get too excited, nothing goes up in a straight line.