bivio reports: Investment Performance??
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bivio reports: Investment Performance?? In working on Portfolio Management for the Model Club MicNOVA, I would like to know, for each stock, how much money I invested, how much I have now, what percent profit (loss) I have. I would like this to included dividend income. I have not seen a report table of this nature on bivio. Even the Repair Shop in BI Magazine almost has this data, but not completely. 1. Am I missing a report I should look at in bivio? 2. I opened Investment Performance, what does the "Annualized Internal Rate of Return" mean? For example, we bought MSFT on 9/16/2009 and it says the Annualized Internal Rate of Return is 1.8%. 3. Why doesn't bivio have a report like this; is there no demand. The Investment Performance report seems extremely tedious to me to understand. I have to go to Investment Performance Detail, and then divide my buy cost by my total shares, and then add the dividend. If I have made multiple purchases, the math is beyond me 4. Is there a way I can create a spreadsheet with this information? Yahoo finance can give me a vague idea, but without the dividends. I am not treasurer, I think by now perhaps this information would be on TDAmeritrade, our broker's site. I want to see very easily 1. ticker 2. total # shares 3. cost basis per share 4. total cost 5. total value gain/loss 6. Compounded annual return If we are expecting 14.8% total return a la the Toolkit SSG, how can I tell if I am at least earing 10% per year on a stock, on my portfolio, without seeing the data in a table, without my computing it? On MI, I see potential, but not performance. I knew the Stockettes werent' doing well, but it was only on disbanding the club that I saw that I had made 4% annualized over 15 years. I took out $5600 total, on a $5000 total investment. It hardly seems worth the effort.. Now I still have the spirit to invest. But I am concerned that I cannot easily see performance in a table so that I can see which stocks are underperfoming and discuss that in MicNOVA. Am I confused, or why wouldn't bivio generate such a report. What are others of you using instead of a table with this information, to see how a stock is performing? thanks, Etana Dear Etana, If you're interested in understanding more about how IRR is determined and how to interpret it, you might want to review the presentation we did on benchmarking which discusses that. http://www.bivio.com/clubmm/file/Public/benchmarking-your-portfolio.pdf Your valuation report tells you the total you have invested in a stock and the difference between that and the current value that you've asked for below. But that doesn't tell you a lot. One stock could have a large gain that was achieved in a month, another might have a gain that took 5 years to get to. The numbers on a valuation report are not useful for making investing decisions. When you project a 14.8% growth you are saying that your investment in a stock should grow at an annualized rate of 14.8% per year. It is very easy to compare your projections to the actual IRR you've achieved. It is an annualized number also. This is your real world growth and includes the actual cash flows you had, including dividends. The rate at which your investment grows depends, not only on the stock itself, but also on your buying and selling decisions. This is why you cannot directly compare the IRR's for two stocks and think you are looking at only the stocks themselves. You are looking at all the investing decisions you made relative to each over the time period you are looking at. Past history does not tell you how a stock will be expected to perform going forward. It is far more useful to look at your holdings in something like a Manifest Dashboard to determine how to manage your portfolio. Manifest now allows you to develop your own projected growth numbers using an Eagle. To decide whether a stock is something you want to keep, your stock discussions should center around the judgments about their business used to make those projections. If you make good portfolio decisions, you will create a portfolio which will provide you with an overall rate of return that you will like. If you focus on really understanding the business fundamentals of the companies you own, you will see more clearly when it is time to keep them as investments and when it is time to move on. If you haven't done well with an investment, it may be that you don't understand it's business well enough to make an informed investing decision. That is probably also a good reason to let it go and look for something else. -- Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio > When you project a 14.8% growth you are saying that your investment in
a stock should grow at an annualized rate of 14.8% per year. <
An expectation for 15% annualized growth should be
for a portfolio as a whole, over a period of five years or so. You should
NOT expect a potfolio to achieve 15% during every individual year, and
you should NOT expect every individual stock to achieve 15% annualized
even over a period of years.
-Jim Thomas
Good point Jim. I'd have to agree with you. I just used the 14.8% in the answer because it was a number that had been mentioned. I think Etana would appreciate hearing any ideas for portfolio growth goals. Do you have certain ones that you use? -- Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio Jim, I totally understand that, but I have achieved 4% in my club portfolio and I don't know about personal portfolio, maybe 4-6% in 15 years. When I read the BI Repair Shop, it seems clubs are moving from 100K investment to $120 or $150 total market value, over 10-15 years. That is not 15% portfolio or 12% growth or 8% i don't believe. I don't know why the numbers aren't spelled out so we can see what is missing and where to improve. There is the aura that everyone is gaining 10-12% Total return, but that only Etana is not, but I don't think people even know how they are doing and I thing there are many BI investors who have not done well in the past 15 years. Otherwise membership in BI would not be dwindling if so many of us were doing so well. Jim, Do you have a spreadsheet where I can keep a record of my club's portfolio performance, with some or all of the details I wanted to show? I am beginning to create on in google docs but it is tedious and no cell is automatically updated. thanks, eTana On Sat, Dec 3, 2011 at 2:22 AM, Jim Thomas <jimt075@comcast.net> wrote:
-- Etana etana.finkler@gmail.com (240) 678-8142 Hi Etana,
> When I
read the BI Repair Shop, it seems clubs are moving from 100K investment to $120
or $150 total market value, over 10-15 years. That is not 15% portfolio or 12%
growth or 8% i don't believe. <
You posted an expanded version of
that question on the old BI Compuserve forum. Here is a link to my response
there.
The short answer is that the BI Repair Shop
articles do not have anywhere near enough information to determine what sort of
historical return a club has produced (making that determination
is not the purpose of the column). A club such as you describe
above probably started with zero dollars 15 years ago, NOT
with $100K. The Repair Shop column is a forward looking evaluation
(not backward looking).
> Do you
have a spreadsheet where I can keep a record of my club's portfolio performance,
... <
Yes, but it does the same thing as the bivio
Performance Benchmark report. If you're already using bivio for this club,
you are better off using that bivio report.
I would agree that most investors (BI or
otherwise) probably have only a vague sense about how well or poorly their
investment portfolio is performing.
> ...
with some or
all of the details I wanted to show? <
If I'm understanding you correctly,
you believe that knowing the total dollar amount of profit,
including dividends, vs. the purchase cost of a stock would be
information you could use to help make buy/hold/sell decisions. I
disagree (I don't see how that information is helpful at all for that
purpose). I believe all the other information you asked for
is already available through bivio.
-Jim Thomas
Hi Etana, > I knew the Stockettes werent' doing well, but it was only on > disbanding the club that I saw that I had made 4% annualized > over 15 years. I took out $5600 total, on a $5000 total > investment. It hardly seems worth the effort. You didn't invest $5,000 all at once 15 years ago, right? You invested something like $25 or $30 each each month for 15 years. Do you know what that amount invested monthly over the past 15 years would be worth today if it had been invested using an alternative approach? Say, if you had invested in an low-cost S&P index fund rather than in the club? Without knowing that, I don't see how you can evaluate whether or not an ending value of $5,600 was worth the effort and (hopefully) the education gained. bivio has the data to answer that question (by doing for you as an individual what it does for the club as a whole on the Performance Benchmark report). However, bivio does not have a report that does that for individual members. Perhaps that is something for them to consider adding. -Jim Thomas > I think Etana would appreciate hearing
any ideas for portfolio growth goals. Do you have certain ones that you
use? <
I find the Manifest Investing relative return
approach more logical than a fixed absolute percentage goal (such
as 15%). In other words, after evaluating a potential average future
return available from "the market", aim to exceed that return by 5 to 10
percentage points.
Keep in mind, however, that the "market
return" you set your target relative to may end up being in
a very different place that you thought it would be. If you aim for a
+5% *relative* return (say, 15% absolute return relative to a 10%
expectation for "market return"), you should be satisfied if you end up
achieving 0% absolute return during a time period when the "market"
turns out to have actually returned -5%. (0% is five percentage
points better than minus 5%.)
-Jim Thomas
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