How to calculate portfolio performance when the profit comes from 1) Selling the securities, 2) Getting the dividends?
Imagine the following portfolio and transactions.
- 2018 - Buy 100 shares of Exxon Mobile, 10 USD a piece.
- 2019 - Buy 100 shares of Exxon Mobile, 11 USD a piece.
- 2020 - Get 100 USD dividends.
- 2020 - Sell 150 shares of Exxon Mobile, 15 USD a piece. Tha acquisition value is by FIFO method 1 550,0 USD.
Now, the goal is to calculate the yield of whole portfolio of current year. But the problem is that how to calculate the acquisition value? The formula of calculating the Yield should be the following: Yield = Profit / Amount (Buy). Amount (Buy) is the acquisition value of securities.
But there may be different scenarios within certain year.
- Getting only dividends - Take into account the acquisition value of securities (column G, 2100 USD).
- Selling only securities - Take into account the acquisition value of securities (1550 USD).
- Getting dividends and selling securities - What is now the acquisition value? We cannot sum the 2100,0 USD and 1550,0 USD because we only have shares worth of 2100. And in my opinion 1550 USD is not right also because the dividends were received on the basis of 2100.
It's seems to be quite difficult to make difference when and how to count the acquisition value and when not. What should be the right way to make these calculations?