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alpha

Questions on using, creating, or understanding data in Fund Manager reports.

Postby Mary Kennedy » Sat Oct 27, 2018 8:18 am

I am trying to use alpha for the first time and have several questions:

a. I think I may be missing something here, but it sounds like I have to select one of my own holdings as my benchmark, so that I am really comparing everything else to that. Am I wrong about that?

b. On the other hand, I can't figure out how to add a benchmark that is NOT something I actually purchased. All my data come directly from my broker via downloads.

c. If I need to have a holding of my own, I'd probably want to tell FM that I bought an S&P index fund about 5 years ago, then get it to download 5 years of price data, so that I could compare all my other purchases to that. But even still I am not sure I know how to enter a purchase manually and not sure that it's presence won't confuse FM because this "holding" won't show up in my broker's account.
Mary Kennedy
 
Posts: 102
Joined: Sat May 08, 2010 2:36 pm

Postby Mark » Sat Oct 27, 2018 8:43 am

Hi Mary Kennedy,

Yes, you need to set up a benchmark in order to calculate alpha. This is quite easy to do, and you can keep it in a separate sub-portfolio from your owned investments. Just use the Portfolio Editor to create another sub-portfolio called "Indices" for example, that is separate from your owned accounts. For example, it could be some structure like:

Code: Select all
- Master Portfolio
  - Indices
  - My Accounts
    - Acct 1
    - Acct 2


For help on organizing sub-portfolios see the Sub-Portfolio Tutorial.

You can track the S&P 500 in an investment. You own 0 shares. See the symbol ^GSPC on Yahoo. You can get historical and current prices for this symbol from Yahoo. For help on manually creating an investment, see this Getting Started - Manual Entry tutorial and also the Data Register Tutorial.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
Site Admin
 
Posts: 11253
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ

Postby Mary Kennedy » Mon Nov 05, 2018 4:07 pm

Sorry to bother you again. In my effort to generate an Alpha for each of my investments, I have now created a sub-portfolio called "Indices," purchased one share of SnP index, and then I downloaded price data back to 2010.

Next questions:

1. You suggested that I would NOT have to "own" any shares to establish my index but I couldn't figure out how to add this to a portfolio without buying 1 share.

2. Once I had these data established, I returned to my investment report and added "alpha" as one of the fields I wanted to appear in my report. However, FM did not ask me any questions about this--Did not ask which index I wanted to use or what time interval.

3. It also doesn't compute anything in that "alpha" column, just enters "N.A." for every holding.

So what have I failed to do?
Mary Kennedy
 
Posts: 102
Joined: Sat May 08, 2010 2:36 pm

Postby Mark » Mon Nov 05, 2018 5:00 pm

Hi Mary,

You can delete your purchase transaction in the Data Register, so you don't own any shares.

You must assign the index as your Benchmark investment. Use Options / Report Preferences... / Benchmark.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
Site Admin
 
Posts: 11253
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ

Postby Mary Kennedy » Tue Nov 06, 2018 8:05 am

OK, I still have a portfolio folder called indices, with SnP and Nasdaq in it. For SnP I have downloaded 10 years of price data. I then removed my purchase of the S&P.

I had already set the report preferences so that SnP was my benchmark. But I still get an NA down the whole alpha column and still have not found a way to stipulate a time span. And of course the purchases themselves are all at different times.
Mary Kennedy
 
Posts: 102
Joined: Sat May 08, 2010 2:36 pm

Postby Mark » Tue Nov 06, 2018 4:28 pm

Hi Mary,

The alpha calculation is for the comparison period and ends on the ending report date. The comparison period is set in the same Benchmark dialog. If you're still getting NA values it is likely due to interpolation range settings, and insufficient pricing data. You can verify by looking under Help / Logs / Report Calculatuon...
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
Site Admin
 
Posts: 11253
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ

Postby Mary Kennedy » Wed Nov 07, 2018 6:27 am

OK, the period is one year and the date of my report is 11/07. I have daily price data for SnP, including data for 11/07 2018 and for 11/07 2017. Ditto for a few other individual investments that I manually checked.

However, I find that if I ask it to retrieve historical prices, it finally calculates Alpha. So my last question is, Is there a command that will retrieve historical prices for everything, or do I need to request this for one holding at a time?
Mary Kennedy
 
Posts: 102
Joined: Sat May 08, 2010 2:36 pm

Postby Mark » Wed Nov 07, 2018 6:41 am

Hi Mary,

When you use either the toolbar HST button or the menu command Edit / Internet Retrieve / Historical Prices... that retrieves all open investments. Please watch the tutorial on Retrieving Prices which goes over this:

https://youtu.be/9rTWGWjnzUI
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
Site Admin
 
Posts: 11253
Joined: Thu Oct 25, 2007 2:24 pm
Location: Chandler, AZ

Postby Mary Kennedy » Wed Nov 07, 2018 1:06 pm

Woo hoo! I have alpha for everything now! Once again, FM proves to be the 8th wonder of the world! Thanks for all your personalized help
Mary Kennedy
 
Posts: 102
Joined: Sat May 08, 2010 2:36 pm


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