The rate-of-return tag has no wiki summary.
8
votes
2answers
58 views
Is there a term that better describes a compound annual growth rate (CAGR) when it is negative?
When calculating rates of return for an investment or portfolio over time, whether to report or compare performance, one frequently calculates the Compound Annual Growth Rate (CAGR).
I've got a ...
7
votes
0answers
108 views
Yield of a municipal bond with a sinking fund?
How do I calculate my expected return if I buy a municipal bond at a premium with a sinking fund feature?
For example, I'm looking at a bond with a coupon of 5.5%, maturing July 2015, with the ...
-2
votes
2answers
154 views
What is the compound annual growth rate of the major markets?
What historical compound annual growth rates (CAGRs) have the major markets provided? Data as far back as has been recorded is preferable. Specifically I'm looking for returns of:
Short-term, ...
1
vote
1answer
447 views
How to calculate the standard deviation of stock returns?
I'm trying to learn the the Black–Scholes option pricing formula and one of the elements of that formula (according to http://bradley.bradley.edu/~arr/bsm/pg04.html) is the "standard deviation of ...
6
votes
2answers
587 views
What does Personal/Internal Rate of Return mean for a 401k?
My 401k statements show a "Personal Rate of Return" (also called Internal Rate of Return), and I am curious what this actually means.
Does this indicate how my funds are performing in the market? Or ...
1
vote
2answers
226 views
Time-Weighted Rate of Return & Money-Weighted Rate of Return
Background
I am trying to figure out the computational difference between Time-Weighted Rate of Return (TWRR) and Money-Weighted Rate of Return (MWRR).
Let's say, I have a portfolio looking like ...
1
vote
2answers
128 views
Computing portfolio return with net inflow/outflow
in his book "The four pillars of investing", the author describes this simple method to compute the rate of return for a portfolio that has a net inflow of cash:
Without in- or outflow, the rate of ...
3
votes
1answer
144 views
Use my savings to pay out my mortgage on my rental apartment?
My rental apartment at this point is making me a 5% ROI per year. My bank is currently charging me a 5.87% Interest rate on the mortgage, which means I am putting from my pocket to keep this apartment ...
1
vote
2answers
109 views
Are the guaranteed returns of regulated utilities really what they sound like?
In the last few days I've stumbled upon two-year-old editorials like this one and this one stating "as a regulated utility, publicly traded [PG&E] shareholders benefit from a guaranteed 11.35 ...
11
votes
3answers
365 views
How can I determine if my rate of return is “good” for the market I am in?
I am considering a small investment to get started with. What percent rate of return is considered to be good return on investments made in a stock market?
I read somewhere that 25-30% is considered ...
3
votes
3answers
159 views
Table of how many years it takes to make a specified return on the stock market?
Suppose I want to know "if I want to make a 30% return on the stock market, how many years should I expect to wait?"
I know the real answer is "it depends - if the market does horrible it could ...
1
vote
3answers
215 views
Why should I worry about the variance of the return?
I have this doubt (I hope that this is not a completely silly question). If my growth rate depends on the long period average return, why should I worry about the variance of the return? i.e. over the ...
3
votes
1answer
664 views
How can I calculate a “running” return using XIRR in a spreadsheet?
I should say that I'm not married to XIRR, I just want to calculate the return on a running basis in a column next to dates, deposits and balances. Here's a screenshot of a simplified spreadsheet in ...
0
votes
6answers
427 views
Help me understand the oddity of percentage gains and losses?
If you start with $100K, and you get a 50% gain, it's $150K. Then, you get a 50% loss: now it's $75K. Reverse the order (i.e. lose 50%, gain 50%), it's the same thing (a 25% loss). So, 50% up then ...
0
votes
2answers
253 views
Diversified portfolio return calculation & comparison to return from real estate only?
Here's a sample portfolio.
If we assume that he invested $100K in the beginning (2005), is it correct that if he sold his entire portfolio and the end of 2009, he would have received $121,394?
...
8
votes
5answers
238 views
Are long-term bonds risky assets?
I think bonds are debt/loan and fixed-income, so they are risk-free, both short term and long term. But it seems like Bodie's Investment thinks long-term bonds are risky:
For example, assume that ...
8
votes
2answers
97 views
How do I account for newly added money when computing my rate of return?
I have a simple spreadsheet where I track the balance in my investment account. What should I do to handle new deposits in the account?
For example:
End of Day 1: balance = $100
End of Day 2: ...
4
votes
4answers
676 views
Typical return for an IRA? How can I assess if my returns were decent?
The year to date return on my IRA is currently 5.3%, the DJIA is 9.5%, and the NASDAQ is at 7.7%.
Is this normal or should I be disappointed? I'm just starting to pay attention to this kind of ...
4
votes
2answers
220 views
Discussing real estate appreciation: Compound vs. simple interest?
When people say real estate has appreciated 8 % over the past 5 years, do they mean 8 % compounded annually? or simple interest annually?
6
votes
1answer
89 views
Is there a simple term to describe the non commutative property of decreasing and increasing a value by some X percentage?
I.e., $100 decreased by 20% requires an increase of (1/(1-0.2))-1) to return to $100. Is there a simple name to refer to this?
1
vote
2answers
95 views
Is it possible to estimate individual rate of inflation for a person as against the avg inflation rate for that country?
Even though normally we all use a specified inflation rate per country for financial calculations (i.e real returns, salary increases, etc..) isn't it possible for the inflation rate to have different ...
4
votes
1answer
718 views
Do net returns on mutual funds include expense ratio?
I'm considering an actively managed bond fund (DODIX) versus an similar index fund (VBMFX). Both are high quality intermediate funds. The 10-year return of DODIX (exp ratio 0.43%) is 0.86% higher than ...
2
votes
3answers
131 views
Is it always sane to follow inaction if the only alternative investment carries a risk of higher than 50% to end up with loss?
Or is there a theory that proposes inaction is worse?
3
votes
1answer
360 views
How to quantify differences in return with low expense ratio vs high expense ratio mutual funds?
One often repeated piece of financial advice is to work to minimize your expense ratios in your mutual funds in order to maximize your returns.
While it is often straightforward to determine the ...
4
votes
1answer
178 views
How to determine desired/required value with “value averaging”?
As opposed to dollar cost averaging (DCA), value averaging (as described in this eHow article) is a technique where the investor determines the value the investment should have after a given time ...
3
votes
3answers
376 views
What is a decent rate of return for investing in the markets?
This article indicates that the average rate of return for stocks is 4% after inflation, fees, and taxes (called "net-net-net" in the article).
In the article several investment professionals are ...
6
votes
3answers
1k views
Calculate annualized return on stock with multiple transactions
I understand how to calculate the Annualized return on a stock when I have single purchase ie
(principal + gain/principal) ^ (365/days) - 1
but how is it calculated when I have multiple buys and ...
8
votes
4answers
475 views
How to calculate the total return on buying a home?
How to calculate the total return on buying a home, considering things such as :
home value
down payment
constant mortgage payment (going from mostly interests at the beginning to mostly principal ...
6
votes
2answers
1k views
Comparing IRA vs 401K's rate-of-return with dollar cost averaging
I have both an IRA in Vanguard and an old employer's 401k with Fidelity management. I would like to compare the performance between the two accounts over time, in order to determine if I should ...
3
votes
3answers
553 views
How to calculate the rate of return on selling a stock?
How to calculate the rate of return on selling a stock?
4
votes
3answers
2k views
How do you calculate the rate of return (ROR) when buying and selling put options?
How do you calculate the rate of return (ROR) when buying and selling put options?
