Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25869  
Subject: Re: fund VS. personal rate of return Date: 12/7/2012 4:17 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Without looking at your specific numbers, this is why you would see a lower personal rate of return than the fund. Note, this will ALWAYS be the case when you are dollar cost averaging in and when you compare YTD numbers and your personal numbers - unless the fund goes straight down and never up - then your PROR would actually be better that the fund performance.

Notice that at the beginning of the year the price increased. Come May and the price went down. This means that everything you bought after 1/1 through the first peak of the year, was bought at a price higher than the YTD starting point.

This means that for 5/12s of the year, you bought at a higher price than the YTD number.

Even when the fund bottomed out in July, the bottom was still higher than the price on 1/1. You continued to buy (dollar cost average in) as the fund bounced back and then finished up nicely for a good YTD number - but all of your purchases through the rest of the year were again at a price higher than 1/1.

All this doesn't mean that you did lousy. Quite the contrary. You simply bought more shares over the summer than you are buying now, and the shares you bought in April and May did not recover in price until September.

Your average price is probably pretty good and much better than the 1% PROR indicates.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.