Measuring Portfolio Performance

How can we measure portfolio performance? Do you know that the returns that are seen in the blogs or newspaper may be imprecise?

Recently, Interative Investor Blog (IIB)has two posts that cover them. I find them quite interesting and relevant. The posts:
http://blog.iii.co.uk/2007/10/08/249/
http://blog.iii.co.uk/2007/10/12/returnagain/

Prior to reading the posts, I use unit value method and monthly time-weighted method to compute my portfolio performance. The unit value method is used to give me a weekly price of my portfolio, while I use the monthly-weighted method for a real-time returns. The returns are year-to-date returns.

IIB's posts introduces XIRR (a form of internal rate of return computation) method. I have tried out the XIRR. XIRR measures the yearly internal rate of return. Hence, it would give me a higher percentage return (compared to the returns I am already computing) This is becasue XIRR would adjust the year-to-date 2007 return to an annual return. Or a higher return in a shorter period would translate to a higher annual return.

Hopefully, IIB will have a one more post to round up the discussion on measuring portfolio returns.

Comments

Post a Comment

Popular posts from this blog

China Banks, Trimming down Position

Stock Idea: China Banks

 I have been buying China banks like China Construction Bank and Bank of China recently. In the currently slightly expensive market, China banks still have low PE and low P/B, notwithstanding doubts on their credit quality. I may continue to accumulate if their share price drop.

Trimming down positions

I have also been trimming down my positions in Aug - Sep:
- Sold a portion of 800 Super. After the sale, 800 Super is around 2% of my portfolio. 800 Super will start to operate the WTE plant at end 2017. Will wait to see how much the plant will help the bottomline.

- Sold my entire position in Soilbuild Reit after it announced its lease issue with NK Chemical. Soilbuild Reit's position is not large, around 2% of my portfolio. The sale carries a small profit as I bought the Soilbuild Reit at $0.66.

- Sold half of my stake in Ping An and 1/4 of my stake in CM Bank. The money from the sale are used to buy the China Banks

- Sold a smallish position in Nordic. Can&#…
Read more

Sell Sell stocks in SG market

For the past month, I have been selling stocks in the Singapore market

- Sold my second half of OCBC stocks at $11.20. Still keeping DBS. I do not intend to sell any DBS, even though the market is pricing in DBS having higher provisions.

- Sold all my stake in Far East Hospitality. I don't like its latest quarter results.

 - Sold my remaining stake in Valuetronics, before it went ex-dividend. The price of Valuetronics may be higher now after including the dividends. But I decide to take profit as I no longer like the risk-reward in Valuetronics

- Sold my stake in Fraser Logistic Trust at $1.11. The price-to-book ratio for Fraser Logistic trust is more than 1.15, which is no longer attractive for me to hold. Of course, Fraser Logistic trust may still have room to run.

Personally, I am finding that Singapore market is getting fully valued and it is hard to find any interesting stocks to buy. Yes, there are low price-to-book property stocks in Singapore market, but property stocks ar…
Read more