Monitoring returns

[Lacy]

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:dah: Hey, regarding a long-term buy/hold scenario, is there an "easy" way to track your portfolio's % performancewithout having to do a lot of monitoring and calculating of each individual fund?I mean, seems like in the quarterly statements it would give an indication of the total quarterly performance of your own combination of funds. Perhaps it does, but I can't find it in my statement. This would make it easier for me to understand if my allocation combinations were performing up to expectations. Again, I realize that the performance of each individual fund is indicated, but I want to see the actual performance of my own distribution of funds.

 

[Mike]

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Take the current balance and subtract 1/2 the amount contributed over whatever period of time you are looking at. Divide this by the initial balance plus 1/2 the amount contributed.

Example: current balance $20,000; amount contributed $5000; initial balance $10000.

So, it'd be $20,000 - $2500 / $10000 + $2500 = $17500 / $12500 = 1.4, which translates to +40%.

Alternatively, you can use Tom's MS Excel spreadsheet. You can also use MS Money, although you have to manually enter the prices every time you update them and buy/sell any shares. I've switched to a static allocation, so it's easier to deal with now - I just have to split up my percentages each time there's a contribution (every two weeks).

 

[Lacy]

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Okay, I'm sure I'm an idiot, but what I'm getting at is this. With my VanGuard accounts, I get a simple indication of the % that my account yielded, regardless of how I reallocated them. They just report...."your overall performance for all transactions was 8% (or whatever). Why can't TSP be that simple? Why the need for all the spread sheets and the input of data and the mathematical calculations?

 

[tsptalk]

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How do you think they came to the% on your statement? I'm guessing there was some math involved.

I agree, it would be nice if TSP did that for us.

 

[Rolo]

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tsptalk wrote:

I agree, it would be nice if TSP did that for us.

True, but remember: low overhead charges.

 

[Lacy]

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One more try...If I'm way off base here, then all of you can at least give me a bit of credit and marvel at the fact that someone so dense could have the sense to save money at all I do not have access to the spread sheet, I tried it, but could not utilized it on my computer.

Now, if my personal account (regardless of the allocations and without regard to monthly contributions) increased on 4/6 by $400, then can I simply use the following daily calculation......

400 is ________% of ________________(my total balance on 4/5) = my daily percentage of earnings.

Let's say it was .26 for the day, then can I do that calculation daily and multiply by 30 at end of month to get monthly % of overall earnings?
i.e., if the account were to average .26 each day, could you say .26 x 30days = 7.8% return that month?

I was not good in math, be patient with me.

 

[Lacy]

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One more try...If I'm way off base here, then all of you can at least give me a bit of credit and marvel at the fact that someone so dense could have the sense to save money at all I do not have access to the spread sheet, I tried it, but could not utilized it on my computer.

Now, if my personal account (regardless of the allocations and without regard to monthly contributions) increased on 4/6 by $400, then can I simply use the following daily calculation......

400 is ________% of ________________(my total balance on 4/5) = my daily percentage of earnings.

Let's say it was .26 for the day, then can I do that calculation daily and multiply by 30 at end of month to get monthly % of overall earnings?
i.e., if the account were to average .26 each day, could you say .26 x 30days = 7.8% return that month?

I was not good in math, be patient with me.

 

[Wheels]

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If you are going to use the paper and pencil method, it would probably be a lot easier to take your balance on the last day of each month, subtract out your contributions, and do the math from there. Example: March 31st account balance is $10,000 - Account balance on April 30th is $11,300. You made $300 dollars in contributions that month so your account balance is $1000 higher which is 10% of your March 31st balance. April = 10%.

BTW, there are only 20 or so trading days in a month so be careful if you use your daily method.

Dave

 

[Lacy]

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Mr. Wheels (Dave), are you saying that my calculation is valid...except, of course, for figuring in the non-trading days? Thanks for your response.

 

[Wheels]

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Well I guess it's valid. You would have to know what day your contribution is being credited to your account so you could subtract it out. It seems so cumbersome. If you could find someone you know, or even someone on this board, to help you get Tom's spreadsheet up and running on your computer, that would make your life a lot simpler.

Dave

 

[Guest]

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Lacy wrote:

One more try...If I'm way off base here, then all of you can at least give me a bit of credit and marvel at the fact that someone so dense could have the sense to save money at all I do not have access to the spread sheet, I tried it, but could not utilized it on my computer.

Here's credit and marvel> The guys asked me to give this to you.

 

[cowboy]

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Wheels wrote:

If you are going to use the paper and pencil method, it would probably be a lot easier to take your balance on the last day of each month, subtract out your contributions, and do the math from there. Example: March 31st account balance is $10,000 - Account balance on April 30th is $11,300. You made $300 dollars in contributions that month so your account balance is $1000 higher which is 10% of your March 31st balance. April = 10%.

BTW, there are only 20 or so trading days in a month so be careful if you use your daily method.

Dave

I would make it more accurate by saying only half of the 300 is working for you during the month. This works great for a year also. As your contributions will only be working for you half the time. I really like the quarterly statements at tsp it will tell you what was contributed and what the increase/decrease was during the quarter. I believe daily figuringwhere your at is not good for you as you look at all the wiggles and miss the objective which is long term. Micro-managing to me will get you no where in stocks just like it does in business. To me too many people try to figure out what the lost or gained daily or weekly and not consentrating on what the funds are telling you. Make a move go kiss the wife or hubby and maybe you will get lucky!!

 

[Lacy]

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Woweee WonderWoman! Thanks for all that. I guess the guys were too shy to do it themselves. Nevertheless, it is the thought that counts.:u

 

[Lacy]

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Thanks, Cowboy! Your advice is well-taken. I do understand the possible pitfalls of daily monitoring, but I thought it would help me to monitor it for a while to see what the actual return of my "long term" allocation is. I've stopped shuffling my funds around with the market because I'm not able to access Tom's comments during the early part of the day....between6a.m. and Noon....and also, that strategy was driving me insane. I've decided to "hold" for the long term, but I want to be moderately aggressive and I want to try to achieve at LEAST an 8% return to reach my retirement goals. I didn't know how else to see whether my allocation was working other than to try to use some sort of calculation and monitor it all for at least a while. Thanks!:^

 

[rokid]

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Lacy,

Attached is a spreadsheet that calculatesthe year-to-date (YTD) return and an estimated annual return. It's not sophisticated, but it's easy to manage andgives you a good idea of how you’re doing. Note, I've locked the cells containing formulas (you can unlock them from the tools menu). The other cells, e.g. amount invested, balance, and months YTD, can be modified to reflectyour changing data.

 

[cowboy]

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Lacy wrote:

Thanks, Cowboy! Your advice is well-taken. I do understand the possible pitfalls of daily monitoring, but I thought it would help me to monitor it for a while to see what the actual return of my "long term" allocation is. I've stopped shuffling my funds around with the market because I'm not able to access Tom's comments during the early part of the day....between6a.m. and Noon....and also, that strategy was driving me insane. I've decided to "hold" for the long term, but I want to be moderately aggressive and I want to try to achieve at LEAST an 8% return to reach my retirement goals. I didn't know how else to see whether my allocation was working other than to try to use some sort of calculation and monitor it all for at least a while. Thanks!:^

You will do it Lacy! The 8%return is a very reachable goal. Here is what you do at the end of the year. Calculate your returns andthen calculate them the way you would have been investing prior to you managing the money if you did better than what you were doing in the past it wassuccessful!!!!!! If not go back to the way you were doing it or try some other method. Don't get caught up in the day to day fluctuation so much and realize your going to make mistakes.

 

[Lacy]

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Thanks rokid! I'll give it a try

 

[Lacy]

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Cowboy, much thanks! I intend to experiment a bit and get a good feel of how to calculate personal returns and then I'll relax and monitor only on a yearly or quarterly basis. I really appreciate all the help. BTW, my current long-term allocation, based on an 11-yr horizon is G-15, F-0, C-40, S-25, I-20. If you have any opinion on this, let me know. I want to hedge but I don't want to diversify myself right back to ZERO!..probably only I could do that.

Have a great weekend!

 

[cowboy]

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Lacy wrote:

Cowboy, much thanks! I intend to experiment a bit and get a good feel of how to calculate personal returns and then I'll relax and monitor only on a yearly or quarterly basis. I really appreciate all the help. BTW, my current long-term allocation, based on an 11-yr horizon is G-15, F-0, C-40, S-25, I-20. If you have any opinion on this, let me know. I want to hedge but I don't want to diversify myself right back to ZERO!..probably only I could do that.

Have a great weekend!

Your allocation looks fine and if you have plenty of time prior to retirement you may find yourself getting more foxy as you learn the ropes and the only way to learn is to risk. Don't worry about the down day as tomorrow it will all change it always does and cowboy gets humbled all the time.