Author Topic: Return over Deposits  (Read 2008 times)

gamassey

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Return over Deposits
« on: July 14, 2013, 08:52:31 PM »
I see a lot of people on this form post performance numbers for their portfolios.  I appreciate being able to see how others are doing since I am still very new to this and not sure what my ROI will be.

One of the performance indicators I see is "Return Over Deposits".  I am not familiar with this calculation, can someone please explain how it is calculated. 

Thanks in advance for taking the time to teach me something.

Allen

Zach

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Re: Return over Deposits
« Reply #1 on: July 14, 2013, 09:00:11 PM »
Return over deposits is simply taking:

(Current portfolio value - deposits to your portfolio) / (deposits to your portfolio)

Whereas IRR is a more accurate way to look at portfolio performance - factors in an annualized calculation and also accounts for cash-lag and the date of your initial and supplemental deposits.

Hope this helps!

gamassey

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Re: Return over Deposits
« Reply #2 on: July 14, 2013, 09:05:34 PM »
Return over deposits is simply taking:
(Current portfolio value - deposits to your portfolio) / (deposits to your portfolio)

Thanks Zach, I now understand.

Allen