Measuring Investment Performance: In Accounts with Deposits or Withdrawals

The simple formula for Return on Investment during a period---the one you probably know by heart---does not compute in the presence of cash flows (deposits or withdrawals) during the period. The author examined the modification by Joseph Dietz in 1966 to incorporate cash flows, but his approach is not exact. The more recent Time Weighted Return method circumvents cash flows exactly. Finally, the Internal Rate of Return method includes all cash flows and their dates. All methods can give different values and they do have different meanings. This book explains the equations behind all methods mentioned and instructs on the construction of a personal spreadsheet. Alternately, Excel spreadsheets may be obtained from the author's email address. Finally, the reader's stock broker may have the methods installed on company computers, and will provide help in accessing and using them. For all alternatives, this book provides insight into each method and its interpretation.

Author: Harold Jacobson
Publisher: Authorhouse
Published: 12/05/2013
Pages: 60
Binding Type: Paperback
Weight: 0.28lbs
Size: 8.50h x 8.50w x 0.12d
ISBN13: 9781491830239
ISBN10: 1491830239
BISAC Categories:
- Business & Economics | Finance | General

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