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Updating the numbers



June 07, 2008 – Comments (1)


In January, I said my 2007 return was 12.21%. Turns out that's not exactly right. It was more like 16%.


 Here's what changed. For years, I've been calculating returns by hand because:

a) Quicken has a lousy portfolio manager.

b) Other portfolio tracking software I've tried is either clunky, imcomplete, or expensive.

Thus I've decided that I need to get smarter about spreadsheets, Excel specifically. Earlier today, I toyed around with the calculation for Internal Return of Return with both Excel and the simple-yet-still-elegant spreadsheet at Google Docs.  (The XIRR function works quite well in both.)

More about XIRR and spreadsheets can be found here.

The avg. IRR for my primary stock picking account -- a SEP-IRA -- is 11.22% since Sept. of 2003. Not bad, but I can do better. I know because my annual IRR has risen every year:

* 7.16% in 2004 

* 7.82% in 2005

* 12.92% in 2006

* 15.91% in 2007.

I'm on track for an 11.43% return in 2008. Here's to hoping your returns, and mine, are even better.

Foolish best,

Tim (TMFMileHigh) 

1 Comments – Post Your Own

#1) On June 07, 2008 at 6:02 PM, MakeItSeven (31.23) wrote:

"I've been calculating returns by hand"

I used to do that but it has become impossible since I have too many trades to track.  Thanksfully, TDAmeritrade can create both the .txf and the .xls files for income tax purpose.  The only thing I need to do is to download and import the .txf file into Turbo Tax (BTW, it blows up with too many entries) or use the .xls file with Excel.

I went to H&R Block and they could not handle my Schedule D either.  There were too many trades and if they just added all the trades together into a single big "summary" trade then the numbers became too big for their tax program.   They charged me some $670 for the tax returns which I threw away when I got home since they missed an item which would have costed me thousands of dollars.

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