9. How to estimate your true return
Sure, it's easy enough to click on our portfolio tracker and figure out the annual return of the various funds you own. But did your entire portfolio beat the market? To find out, complete this easy worksheet, suggests Colorado Springs financial planner Allan Roth.
A. The dollar value of your portfolio at the beginning of the period: __________
B. The portfolio value at the end of the period: _________
C. The net amount you added to or withdrew from your portfolio over the period (if it's a net withdrawal, the number will be negative): __________
D. Your portfolio's gain or loss (B minus C minus A): __________
E. Average amount in your portfolio during the period (A plus half of C): __________
F. Your estimated percent return (D divided by E times 100): __________
This worksheet isn't perfect. It assumes that all investments or withdrawals you made over the period in question happened in the middle of the period. But unless you made a huge withdrawal or investment at the very beginning or end, the results come pretty close. --Elizabeth Fenner
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