Questions tagged [rate-of-return]

For questions relating to various measures of the rate of return on an investment, e.g. Internal Rate of Return, Financial Management Rate of Return, etc. Note that questions about these terms that don't apply to personal finance or actual problems you face, e.g. homework questions, are probably off-topic.

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How can I calculate cumulative rate/gains for retirement fund in a spreadsheet throughout a year?

Novice to retirement funds and investing here. I'm wanting to build a spreadsheet in Excel that can help calculate my annual rate of return for retirement accounts. I have some elementary questions ...
SeligkeitIstInGott's user avatar
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1 answer
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Calculating return on ISA

I'm based in the UK and trying to calculate how much I've made in my ISA. Below is a mock-up of the monthly investments and how I calculate my returns where I take the current price divided by the ...
leesin's user avatar
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1 answer
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How to Calculate Future Inflation-Adjusted Investment Balance with Monthly Contributions, Annual Interest, and Fees

I would like to calculate the future value of an investment, considering monthly contributions and an annual interest rate (i.e., return). I also want to adjust the final figure to account for annual ...
StatsScared's user avatar
0 votes
0 answers
28 views

ESPP Annualized Rate of Return Calculation

I have a standard ESPP offering with a 15% discount on purchase price with a 3 month lookback. The length of the offering period is 3 months. However, there is a 18 month mandatory holding period ...
finance_enthusiast1986's user avatar
9 votes
5 answers
3k views

Rate of return on an Life Insurance Annuity

So as I approach retirement age, many people are out there suggesting annuities as a way to fund retirement. It's seductive, as they typically have around a 6% payout, that is 100K buys you 6k worth ...
Pete B.'s user avatar
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1 answer
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How can I calculate the time weghted return?

I have switched frequently between ISA providers and I want to see how much my investments have truly increased. I have a spreadsheet where column 1 is the date I invested a certain amount, column 2 ...
TheAnonymous's user avatar
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3 answers
65 views

Portfolio performance metrics in presence of cashflow [duplicate]

Given an investment portfolio and a ledger of withdrawls and deposits, I'd like to derive a performance metric that would allow me to compare its performance of a stock index. A randomly generated ...
Angstrom's user avatar
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2 answers
51 views

Total shareholder return calculation

I have investments where I have added to them at various dates over several years and received dividends at various dates. I don't reinvest the dividends in the company but use them to invest across ...
Tom Entwistle's user avatar
3 votes
2 answers
1k views

How to maintain NAV (Net Asset Value) for family fund

I have a Google Sheet which consolidates multiple funds in which I am invested. I also track my trades in the same sheet and update the profits to track XIRR returns overall. This is working fine for ...
Raj Pawan Gumdal's user avatar
2 votes
2 answers
111 views

Money-Weighted Returns calculation clarification

I found out this is the calculation for the Money-Weighted Returns. From what I understand, PVO can also be seen as "Present Value of the portfolio". If this is the case, doesn't the right-...
Wenuka's user avatar
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1 answer
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How to deal with multiple IRR and no IRR situation?

I was doing analysis for a project to be taken which is for a short duration and which has inconsistent discount rates to be applied, thus I cannot use Modified IRR and neither NPV, but I am facing a ...
rajan baswani's user avatar
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How to evaluate if an asset's return distribution can be modeled by a Gaussian distribution?

How to analyze the distribution of the return? Are there procedures for a bunch of tests to see how well it fits different distributions? Or derivation of formula from the stochastic process?
hello_world's user avatar
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calculate monthly rate of return on fidelity website

How do I calculate monthly rate of return for a particular investment account on fidelitys website. I have couple of investment accounts and IRAs. I want to understand the change in the investments ...
money.frictionlesspulley's user avatar
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0 answers
50 views

Why use NOPAT as numerator for ROIC

I have been researching online, and it appears that the prevailing recommendation is to use NOPAT (Net Operating Profit After Taxes) for calculating return on invested capital. The purpose of using ...
user510's user avatar
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4 votes
1 answer
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How to calculate portfolio performance without tracking each individual transaction

How does one go about calculating the performance of a portfolio when the portfolio is robo-managed and rebalances often, therefore making tracking every transaction and exact holdings over time a ...
Hilikus's user avatar
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2 answers
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How do I compute the annual risk-free return?

I need to know what the annual risk-free rate of return has been. I know no such rate actually exists, so let's say I want to use the "overnight" rate as a proxy. But the overnight rate is ...
Amended's user avatar
2 votes
1 answer
118 views

What is the difference between Capitalization Rate and Return on Assets?

In real estate, the capitalization rate (cap rate) is one of the metrics used to assess the rental profitability of a property. The formula for capitalization rate is net operating income divided by ...
Flux's user avatar
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1 vote
2 answers
54 views

How to deal with spinoffs when calculating money-weighted rate of return (MWRR) of a stock investment

I am using a spreadsheet's XIRR function to calculate the money-weighted rate of return (MWRR) of my investment in "X Corporation" stock. X conducted a spinoff of "Y Corporation". ...
Flux's user avatar
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2 votes
1 answer
97 views

How to calculate Quartile (or Decile) returns

I have split the following portfolio of 20 stocks into 4 quartiles by say market cap. My main question is how would you calculate the Quartile return? Would you rescale the weights within each group ...
Maddy's user avatar
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1 vote
1 answer
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Calculate Dividends Return from Total & Price returns

I understand Price returns and Total returns for stock indices. For example, total returns account for Dividends paid by the underlying stocks assuming they are reinvested back into the same. How do ...
Maddy's user avatar
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3 votes
0 answers
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Is there a correlation between stock market returns and GDP growth in emerging markets?

Contrary to most people's expectations, there is a slight negative correlation between per capita GDP growth and real stock market returns. References: Is There a Link between GDP Growth and Equity ...
Flux's user avatar
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1 vote
1 answer
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When using TWRR for an individual stock, how do I treat non-reinvested dividends?

I'm researching time-weighted rate of return calculations as a performance metric to use with individual stock security holdings. I've read multiple sources of information to include but not limited ...
tim.rohrer's user avatar
4 votes
1 answer
298 views

How do I calculate the performance of a stock investment in the presence of dividends, additional investment and partial sales?

What is a single metric I can use to calculate the performance of a stock investment in the presence of dividends, additional investment, and partial sales? Such a metric should be comparable across ...
Flux's user avatar
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0 votes
1 answer
95 views

Calculating CAGR from annual investments

Let's say I invest x amount at the beginning of each year. After N years, my total investments are worth y. How do I calculate the CAGR? As a bonus, assume that my only tool is Google Sheets.
relatively_random's user avatar
2 votes
1 answer
388 views

Understanding Time-Weighted Rate of Return

In general I consider myself a relatively maths-literate person, but I'm really struggling to understand TWRR (Time-Weighted Rate of Return); at least as my investment provider is presenting it to me. ...
Andrew Ferrier's user avatar
2 votes
0 answers
31 views

How to calculate profits from a short position [duplicate]

Say I have a $100 balance, the margin requirement is 10%, I short a stock at $100, and the stock drops down to $10, is my profit 90% or 1000%? To more more specific, is the profit 90% relative to my ...
blahahaaahahaa's user avatar
4 votes
2 answers
647 views

How is the average return rate of the S&P 500 annual return calculated?

I am trying to understand where the famous average return rate of about 10% of the S&P 500 comes from. In most conversations, the usual starting date is on 1965. Its averaging closing value at ...
Patrick.B's user avatar
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2 votes
2 answers
60 views

CAGR of Monthly Close Prices

In step 7 in this tableau tutorial he uses the number of periods as 12 I believe this number should change. So for instance if we started with January to March, the number of period would be 3. Then ...
user3553260's user avatar
6 votes
2 answers
3k views

What is the real return of a portfolio? Markowitz vs "real" return

I am working with mean variance optimization (MVO) and as such after "training" my model I test the results on a test dataset. Markowitz states that the return of a portfolio is the "...
Ventura's user avatar
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1 vote
0 answers
102 views

How to calculate distribution return for ETF?

I'm trying to calculate Growth and Distribution returns for ASX:VGS for 2021 based on historical data, but the results do not match what's published. Here I can see that in the 2021 Calendar year it ...
Maxim Mazurok's user avatar
0 votes
1 answer
128 views

Using Sharpe ratio to compare bitcoin investments?

I want to compare investment strategies in bitcoin. So far I was using the money weighted rate of return and was comparing it between two different investors. The investor that has the biggest rate of ...
LeGom's user avatar
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-1 votes
2 answers
169 views

What's the formula behind these two stock trading scenarios?

Let's say I have $10,000 in my account. Scenario 1: If I make 10 trades in a year and each trade I position size using only 25% every time and exit the trade after a 10% gain, my account would grow by ...
Jay's user avatar
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0 votes
1 answer
84 views

Is it possible for the dividend rate to decrease at a constant rate to the future?

I came across the following question; Mayfair corporation is expected to pay 40% dividends to its shareholders as its next dividend. However, the company announces that it is not expecting to pay a ...
S. Tiss's user avatar
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3 votes
1 answer
410 views

How to calculate an annualized rate of return with a number of cash-secured Puts?

For cash-secured-puts I know how to calculate the annual return of a single one like: (Returns divided by Capital at Risk) x (365 divided by Holding Period in days) With a "wheel" strategy (...
user640916's user avatar
-2 votes
1 answer
254 views

Scratching my head about the modified dietz method

I'm trying to compute the money weighted rate of return for my crypto investments using the modified dietz method, as I believe this is the golden standard to measure investment. The formula is quite ...
LeGom's user avatar
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2 votes
6 answers
4k views

Why isn't there a universal investment standard/benchmark?

When I watch golf and look at the results of the top players, I can immediately know exactly how they compare both to the standard (called par) and to each other. Why doesn't investing have such a ...
soakley's user avatar
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0 votes
1 answer
39 views

What is the reason for higher returns in ELSS mutual funds when compared to other flexi cap equity mutual fund?

In general, how does ELSS mutual funds generate higher returns over long term (say 5 years or so) when compared to flexi cap mutual funds? As far I know, in general both the segment of mutual fund ...
Darshan L's user avatar
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0 votes
1 answer
20 views

Calculate the required return using an asset pricing model

The current stock price of HHBA A is 101.00$. The last dividend payed for HHBA A is 3.50$, and dividends are expected to grow at a constant rate of 6%. Now i should calculate the required return using ...
Hrvoje Krizic's user avatar
1 vote
1 answer
66 views

What is "the index-linked variety"?

I am reading this article on The Economist. It says that the new generation will gather lower returns on investments than the previous generations. The authors estimated the future return on equities ...
robertspierre's user avatar
2 votes
1 answer
470 views

Calculating portfolio returns from multiple stocks using XIRR

I am confused and would like some clarification. For around four years I have been building a portfolio of 30 stocks and I would like to calculate the portfolio returns as accurately as possible over ...
Liam's user avatar
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6 votes
2 answers
2k views

How do you factor in inflation when calculating internal rate of return on an investment?

Say you invest $1000 into a venture on day 1. Then you invest another $1000 on day 365. Then, on day 730, its market value is worth $4000. If I were to put these numbers into an Excel spreadsheet like:...
Cerin's user avatar
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2 votes
1 answer
230 views

How to Calculate Return of Multi Positional Trading Strategy

i have a trading strategy that buy multiple stocks in same time and sell another time. I want to calculate return of this strategy. Below table shows my positions that opened and closed. From above to ...
FCTURKEY's user avatar
1 vote
1 answer
212 views

Money-Weighted-Return (MWR) or Time-Weighted-Return (TWR)?

Assume, I monthly invest a fixed part of my income. I strictly transfer this money to my broker account and never take money off (transfer-rule). There, I usually (but not always) immediately add to a ...
Clyde Frog's user avatar
2 votes
1 answer
113 views

What's wrong with the XIRR calculation here?

I am trying to learn how to use XIRR following tutorials.I think I'm overlooking something with this dataset problem when using Google Sheets to calculate XIRR. Can someone be kind enough to explain ...
R11G's user avatar
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1 vote
1 answer
86 views

What am I missing with this XIRR calculation?

I have 70K at the beginning of the year invested in some fund with the below yield each month, is it correct that the IRR would be 50.90%? What am I missing? In some article that I've read, they were ...
Omer's user avatar
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1 vote
2 answers
232 views

0% rate of return + inflation differs from inflation alone

Given that Real Rate of Return = (1 + nominal rate) / (1 + inflation rate) -1 If my nominal rate equals the inflation rate I get 0, meaning that my money is worth the same no matter the inflation ...
f.rodrigues's user avatar
0 votes
1 answer
35 views

Derive Initial investment based on Compounded returns

I know the investment instruments, their average yearly returns, the duration of investment and the target corpus. Based on the target corpus and the average returns, I want to reverse engineer and ...
Sid's user avatar
  • 103
0 votes
1 answer
114 views

Average Annual Total Return - How to calculate fractional number of years?

Per the SEC Form N-1A, P(1+T)n = ERV Where: P=a hypothetical initial payment of $1,000. T=average annual total return. n =number of years. ERV= ending redeemable value of a hypothetical $1,000 ...
James's user avatar
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1 vote
2 answers
111 views

Comparison of expected returns from index funds and single shares

I shall start by saying I know little about markets, investing or gambling, but I do know a little bit about probability. This question is prompted by comments to this question, such as "As a ...
Dave's user avatar
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0 votes
1 answer
207 views

Why would banks offer negative interest rates?

I recently saw news that Danish bank Danske Bank is going to be offering -1% return on balances over $16,000. Obviously nobody wants a negative return on their balances so nobody is going to want this....
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