 Quote:
Originally Posted by dixonge
So theoretically if I began this quarter with 18, contributed an additional 16, and ended the quarter with 40, then ( (40-16) / 18) -1 = 33% ROI ?
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Not really. The equation I used is simple and it works as a close approximation for ROI for me because my contributions during the quarter were under 5% of my portfolio value. In your case, your contributions are almost as large as your starting portfolio value, so you can't use the formula I posted above. To get an exact ROI or internal rate of return, it is probably best to use a spreadsheet that tracks the exact amounts contributed and the dates of those contributions.
My equation works better as the ratio of the contributions relative to the portfolio value approaches zero (sort of like the time steps in a limit function approaching zero that makes calculus work).
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