As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Saturday, 22 January 2011

Measure, Measure, Measure (4) - Revist

Singapore Stock Picker said... I did try it. But your example did not show what happens when you sell shares. All three only show, when you add capital. I tried to google for the answer to no avail too...

If anyone else has problem you may "google" Uncle8888 for help. LOL

XIRR is a tool to track ROC and it is not a tool to track portfolio. For portfolio tracking, you may need to use a separate worksheet to track it. Suggested sample is as follows:



and then you link "Portfolio Value at Closing Price" back to "Portfolio Value" in XIRR.


Read? Measure, Measure, Measure (3)

I realize that some of you may have problem using CAGR to measure your performance as you may periodically add more capitals into your portfolio.

In this case, you may want to use Microsoft Excel function: XIRR to calculate and return the internal rate of return of an investment. IRR (Internal Rate of Return) is quite close to CAGR as an alternate mean of measuring performance.

I have provided three examples on how to use XIRR when you add more capitals as follows:



Portfolio Value = Current Value of all Stocks at last market closing price + Remaining Cash left for investing





                       


















1 comment:

  1. Good morning Createwealth8888,

    this latest one made sense... i guess i will have to restart my XIRR calculation again because i did not seperate those times that i added capital, when it in fact comprise new capital and realised gains.

    ReplyDelete

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