Gauging trading effectiveness

[Ivan]

Hi Mark,

I am trying to use FM to gauge the effectiveness of my trading, as opposed to holding, my investments. What I would like to compare is my actual percent gain or loss from the date I first purchased an investment to the present with the percent I would have earned if I just made a single purchase and held it for that time period, assuming reinvested distributions. Can you suggest what two columns would be best to accomplish this?

Thanks,
Ivan

[Mark]

Hi Ivan,

You could use the "ROI" yield, and compare it against the "TWR" yield. The ROI yield factors in when you added/removed money. It is time and money weighted. The TWR yield excludes the effects of external contributions/withdrawals. It is only time weighted.