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Re: question re: porfolio performance report

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Posted by Mark on November 11, 2000 at 10:13:47:

In Reply to: Re: question re: porfolio performance report posted by jeffrey on November 10, 2000 at 10:19:22:

: : : : : mark,
: : : : : i am trying to figure out (this seems to be another version of a problem that i have with reports in fund manager)what my yield has been, across all money invested (i hesitate to use the word investment, since it seems that "investment" does not have consistent meaning in the report descriptions-- sometimes it seems to refer to stocks which may be invested in giving yield reports on stock prices, sometimes to stocks that have been invested in and giving yield reports on money invested in that stock. that makes it hard to know just what the meaning of the report is, in spite of having the formulae). are there only a few people that have trouble understanding exactly what the reports are reporting on? or might it make sense to rewrite the report descriptions to clarify the issue?

: : : : : this time the problem arises in the 'portfolio performance report'. yields are set to roi. i invested in stock A (which came into existance less than 5 years ago) within the last 6 months. yield for the last 12 months is -62% (no laughing!), yield for 3 years is also -62% (so far that makes sense), yield for 5 years is N.A.. that doesn't make sense. even if the stock didn't exist 5 years ago, it seems that current yield number shouldn't change between 1,3, and five years if the stock was purchased within the last year. there other examples of this behavior within the porfolio. therefore, i can't believe the total portfolio yield number, since several of the stocks aren't included and i now wonder if the report is referring to money invested or stock prices, or something else.

: : : : : very long. sorry. what do you think.
: : : : : jeffrey

: : : : Jeff,
: : : : I'm quite sure there is room for improvement on the documentation.
: : : : Thanks for the feedback on the confusion you've experienced.
: : : : When calculating a yield FM must get a price for the beginning
: : : : date of the yield term. If one doesn't exist on the exact date it can
: : : : interpolate one, but you control how flexible FM should be in searching
: : : : for an appropriate price with the "Interpolation Range..." settings.
: : : : I'm guess the problem with your particular 5 year yield is that you don't
: : : : have a price recorded 5 years ago (since you said the stock is less than 5
: : : : years old). You can allow the interpolation to go before the inception, but
: : : : that option is defaulted to be off. Please see "Yields/Interpolation
: : : : Range..." and press the "Help" button for a thorough description (I hope)
: : : : of this topic.

: : : : Thanks,
: : : : Mark
: : : : --
: : : : Mark Beiley
: : : :
: : : : Fund Manager for Windows 3.1x/95/98/NT
: : : :
: : : :

: : :
: : : i take it from your reply that "portfolio performance" report is not reporting on my particular investing acumen, but on the price movements of the stocks in the portforlio. in which case i would respond that not reporting on a stock if there is no price 5 years previous, but why would the yield be the same for 1 year and 3 years.
: : : and which report would i use to judge my investing acumen. a report that says: for the stated time period, for the stocks in the portfolio, regardless of the fact that different stocks have been held for different parts of the stated time period, here is the total return.

: : : thanks,
: : : jeffrey

: : Jeffrey,
: : The portfolio performance does report ROI yields, which take into account
: : how well you timed the market (when you put money in/out). Even though it
: : is calculating the ROI yield, it still requires a price to be found at
: : the beginning of the yield term. The portfolio ROI yield will always
: : interpolate a price for each investment, even if each investment does not.
: : The interpolation range settings control only the investments, not the
: : portfolio ROI.

: : The ROI yields are what you're looking for. There is also an ROI Yield
: : report, in addition to the portfolio performance report, you may want to use.

: : Thanks,
: : Mark
: : --
: : Mark Beiley
: :
: : Fund Manager for Windows 3.1x/95/98/NT
: :
: :

: mark,
: am i understanding you correctly? you are saying that the total portfolio yield number in the 'portfolio performance' report is giving me a total yield for the stated time period for all the investments in the portfolio, even though some of them show a yield of N.A.? or, to state it differently: all the yield N.A. investments are still included in the 'total portfolio yield' number? will the yield number include yields for stocks if i haven't owned them at all during the time period?

Yes, this is correct.

: is this yield number the IRR for the portfolio.

We're calling it ROI, but it is also referred to as IRR.

: why interpolate a price for a time when the stock is not owned?

Good question. For ROI yield calculations this isn't really necessary, but
that is the way it works for Fund Performance yields, and it works the
same for ROI yields. We could really improve this, by eliminating this
case from causing an NA to be reported.

: i find it curious that investments may show a %gainI figure, but still show a yield of N.A.. infact, one investment has a beginning value, %gainI, a price at beginning of yield period, and still shows N.A.

: do other people have similar problems understanding this report?

: sorry to be asking so many questions, but since i am finding that this is not intuitive, i need to be clear about the information i am getting on the reports.

: thanks again,
: jeffrey

We've tried to document how each figure is calculated in the online help.
Hopefully my answers above will help clarify.

Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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