StocksCafe calculates the portfolio TWRR everyday and that is compared to the STI ETF TWRR. I used that to gauge my performance.
Anyhow, I rather spend the time researching for new opportunities. There is no prize to figure out exactly if I beat or don't beat the index to 3 decimal points. My 2c.
Reply to @theintelligentinvestor : yup, like I said, then you're just comparing internally, like what you need to get to reach a certain goal of $XX in a certain time period.
Then whatever methodology doesn't quite matter as long as you're comparing y-o-y and it's consistently used without changes.
Also, on the point on cash drag, my point is not that it's always going to drag on returns.
My point is that if one has to compare against external benchmarks (yes I know u said you don't, I mean "one" as in general), then the effects of a cash hoard has to be taken into consideration. If it's actually a "push" in a downturn, instead of a "drag", so be it, but it's still an actual asset class.
Finally, yea, for sure, focusing to be a better investor is more important, don't think anyone can argue with that.
But it's not mutually exclusive either.
Trying to track accurately doesn't make you do worse and not bothering to track to this extent, doesn't make you do better either.
Created a simple spreadsheet to play with the numbers to make sense of it.
This is what I think based on my observations.
1. MWRR (XIRR) magnifies the gain/loss due to timing of the cash flow.
2. The difference between the two measures can be huge!
3. TWRR is definitely the same as tracking return using NAV.
You can access the worksheet at this link https://bit.ly/mwrrtwrrnav to play with it. I have protected the sheet, so you can only change those values in yellow. Do let me know if there is any error.
Reply to @kc2024 : Oh I c
I take a slightly different approach
I Inject as and when it’s allocated for investment
If there’s nothing to buy, it’s kept as cash inside the portfolio and hence, I talk about the cash drag
Basically I’m trying to mimick the conditions that a fund manager faces in real life
He can’t tell his clients to keep their cash until he finds something... and he’s constantly pressured to deploy cash or it’d b a dead weight
StocksCafe calculates the portfolio TWRR everyday and that is compared to the STI ETF TWRR. I used that to gauge my performance.
Anyhow, I rather spend the time researching for new opportunities. There is no prize to figure out exactly if I beat or don't beat the index to 3 decimal points. My 2c.
Reply to @theintelligentinvestor : yup, like I said, then you're just comparing internally, like what you need to get to reach a certain goal of $XX in a certain time period.
Then whatever methodology doesn't quite matter as long as you're comparing y-o-y and it's consistently used without changes.
Also, on the point on cash drag, my point is not that it's always going to drag on returns.
My point is that if one has to compare against external benchmarks (yes I know u said you don't, I mean "one" as in general), then the effects of a cash hoard has to be taken into consideration. If it's actually a "push" in a downturn, instead of a "drag", so be it, but it's still an actual asset class.
Finally, yea, for sure, focusing to be a better investor is more important, don't think anyone can argue with that.
But it's not mutually exclusive either.
Trying to track accurately doesn't make you do worse and not bothering to track to this extent, doesn't make you do better either.
Created a simple spreadsheet to play with the numbers to make sense of it.
This is what I think based on my observations.
1. MWRR (XIRR) magnifies the gain/loss due to timing of the cash flow.
2. The difference between the two measures can be huge!
3. TWRR is definitely the same as tracking return using NAV.
You can access the worksheet at this link https://bit.ly/mwrrtwrrnav to play with it. I have protected the sheet, so you can only change those values in yellow. Do let me know if there is any error.
Do share if any of you have further insight.
Reply to @kc2024 : Oh I c
I take a slightly different approach
I Inject as and when it’s allocated for investment
If there’s nothing to buy, it’s kept as cash inside the portfolio and hence, I talk about the cash drag
Basically I’m trying to mimick the conditions that a fund manager faces in real life
He can’t tell his clients to keep their cash until he finds something... and he’s constantly pressured to deploy cash or it’d b a dead weight
My post on Walter Schloss returns with comments. :-)
#shamelessplug
https://www.investingnote.com/posts/475948
@kc2024 : If I'm not wrong, I believe you mentioned using similar method to calculate returns, based on per unit NAV?
Reply to @kc2024 : Yes, it is TWRR. :-)