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Yikes, you all sound like math whizzes (something I'm definitely NOT). And since I'm not, can I run my simple way of tracking returns by you to see if it makes any sense?

At the end of each calendar year, I calculate what my 'cost' was, that is to say, the net of all additions and withdrawals during the year, plus the 'cost' balance from last year. On a spreadsheet I then plot the cost at the end of each year, and the value at the end of each year. By comparing the two I get an 'overall' or 'cumulative' rate of return. So, if in year 1 I had invested (net) \$1000 and at the end of that year had \$1500 in value, that would indicate a 50% rate of return. If I did the same in year 2, ending with a cost of \$2000 and a balance of \$2300, my 'cume' rate of return is 15%. To calculate what the actual rate of return was for year 2 I take the \$300 gain, deduct the \$500 gain from year 1, and wind up with a loss of \$200. So, according to my figures, my Year 2 return is a 10% loss. Is this a crazy way to do this--it seemed fairly straightforward to me ????

Anyhow, based on this calculation, my total portfolio return including annuities, 401K, IRAs and brokerage accounts for 2003 was 15.38%.

Note that this doesn't quite make up my losses of 20.94% in 2000, 7.05% in 2001, and 4.77% in 2002. As a matter of fact, my portfolio is still underwater with a cumulative loss of .83% since 1994. This is due to the fact that I had many less dollars invested during the gangbuster years (1994-1999) then during the bear years (2000-2002). For example, my 15% return in 2003 netted me double the dollars that my 36% return in 1999 did. Hopefully now that I have a lot more dollars invested, the market will continue to turn around.