| Index | Recent Threads | Who's Online | User List | Search |
|
|
 |
Portfolio123 » List all forums » Forum: Simulations and Portfolios » Thread: Error in calculation of summery returns when adding cash to a Port |
|
Total posts in this thread: 3 |
[Request a Feature]
[Post new Thread] [Add To My Favorites] [Watch this Thread] |
| Author |
|
|
DennyHalwes
Advanced Member UNITED STATES Joined: Apr 28, 2004 Posts: 1532 Status: Offline |
Marco, I was reviewing the gains in the community Ports when I noticed that when a manual transaction to buy additional shares is made the calculations of total return, active return, and annual return do not take this into account. the returns are reported as if the port had increased in value due to price increase instead of number of shares increase. Example: budlob's Port 'Genes SEP' In this Port the highest performing stock is WCC at 14% since the Port's inception on 08/13/04, but the Port summery shows a total return of 24% since then. budlob has added an additional 1.5 times as much cash as the Port started with. Denny ---------------------------------------- "The significant problems we face cannot be solved at the same level of thinking that we were at when we created them". Albert Einstein |
||
|
|
marco
|
Denny, The problem with manual transactions is that you can enter any price regardless of what the stock was trading at on the day of the transaction. So for example if you buy IBM for $50/shr with a manual transaction and IBM closes at $100 on that day, then you automatically get a 100% gain which causes the port performance calculations to be off. A possible fix to this is to not let you enter a manual transaction unless the price is within the high-low for the day, but this might cause more headaches if you forget the exact day when you bought it. At the moment there's no way to add cash to a portfolio, so it cannot be the cause. This is part of the reason why you can't add cash: the calculations for the performance become much more complex. We'll be adding this feature soon though, because many have requested it. Thanks ---------------------------------------- Portfolio123 Staff |
||
|
|
DennyHalwes
Advanced Member UNITED STATES Joined: Apr 28, 2004 Posts: 1532 Status: Offline |
Marco, You miss interrupted my post. On 08/13/04 budlob started the Port 'Genes SEP', with 6 stocks and a total cash value of $40,898.50. These stocks were all purchased automatically by the Port. Later on separate dates of 09/13/04, 09/15/04, and 09/27/04 he made Manual Transactions to buy additional shares. These shares were all bought at the correct prices for those stocks on those dates. On the Summery page, this currently shows up as 'Cash $ -64,063.60' On the Performance page, the '% Cash Invested' made a jump in value from 100% to 240% in the weeks he made the manual transactions. When the manual transactions were made, they effectively increased the cash invested, (based on the total number of shares times their price as seen on the Holdings page) although he didn't actually add cash to the Port. I think this is what caused the error in the calculation of Total Return Exc. on the Summery page. The reason this came up in the first place was that this Port showed up as the best performing weekly and 4 week Port in the weekly emails sent out to members a few weeks ago . This was due to the erroneous jump in performance that was made when the manual transactions were made. Denny ---------------------------------------- "The significant problems we face cannot be solved at the same level of thinking that we were at when we created them". Albert Einstein |
||
|
| [Show Thread Printable Version] [Post new Thread] |
