Neutralize Cash outflows in the Performance

[Thomas20]

Hi Mark,

I set up an cash account were I manually add transaction. During the year I have cash outflows which are not directly connected to the portfolio. How can I neutralize such cash outflows so that there is no direct influence on the performance?

Thanks,
Thomas

[Mark]

Hi Thomas20,

Just record a sell transaction out of your cash account. This does not adversely affect your portfolio's yield, it just takes the money out of consideration.

[Thomas20]

I did that but somehow I don't get the real performance figure, because I am thinking about the following example:

Beginning of year: 100'000
End of period: 84'000
During period: 20'000 outflow of cash

So shouldn't now the overall performance be slightly positiv, depending when exactly the outflows were made?
Because in the "Performance Report" I get a performance figure which doesn't take out the cash outflows fully.
So how can I change this?

[Mark]

Hi Thomas20,

Which 'performance figure' are you looking at? If you look at the "Yield" this is time and value weighted. The %Gain numbers can sometimes be misleading, as they are not time weighted.

[Thomas20]

I look at both figures and they are more or less the same. It could be, that because I set up this portfolio newly and some cashflows are not 100% correct that it gives me a wrong performance. Will check everything and hope I gets solve that way.

Thanks anyway
Thomas