OOP negative resulting in %Gain as N.A.

[pm76tn]

Hi,

writing from Italy so apology for any mistake


I've been reading old posts looking for an answer and I am aware of the %Gain explanation you provided:
The denominator of this equation is your OOP basis. As the OOP basis goes to zero, the %Gain approaches infinite. When the OOP basis is negative, the %Gain is reported as N.A..

my "issue" is this:
-in a Portfolio I have 1 investment with negative OOP
-reason: 1 purchase of 21 shares at 142€ and then 1 redemption of 21 shares at 318€
(no dividends and no further purchases)
-I understand this leads to negative OOP
(and I see it also f.e. in the graph "Cost-Value historical")
-I understand this results into N.A. when in a report I select f.e. "%Gain (end)" or "%Gain (btw)" for that 1 investment

my questions:
1. is there any way to "get around" this somehow?
2. am I correct when saying that despite 1 investment resulting as "N.A." the "%Gain (end)" for the Portfolio is nevertheless correct?

I have done some "manual backtest" and it seems so
(in other words the %Gain (end) for my Portfolio seems to include also the one of the 1 investment showing N.A.)

thanks in advance

[Mark]

Hi pm76tn,

1 & 2) What do you mean by "get around" it exactly? If you're asking if it can still be included in the overall portfolio, then yes, it will still be included. The portfolio calculations adds up all the components (endvalue, begvalue, purchases, etc) before doing the division, so the numbers from all your investments, even those reporting N/A, are included in the overall portfolio figure.

[pm76tn]

Hi Mark,

many thanks for your prompt reply

Thanks also for confirming that also this investment is included and correctly computed in the overall portfolio

By "get around" I meant if there is any chance to have a %Gain displayed in a report also for an investment which has a negative OOP

example:
-purchases 10 shares at 100 USD on 01/01/20
-sell those 10 shares at 150 USD on 01/01/22
-no dividends and no further purchases
-I assume this will generate a negative OOP resulting in N.A. %Gain
-I'd like to know if, despite of the above, there is a chance to get 50% as %Gain in a report

hope this makes sense
(I'm somehow managing/monitoring investments for my father and brothers and though I got them to understand the concept of ROI, having a %-number showing the "historical" gain of investments not anymore in the portfolio would be nice)

[Mark]

Hi pm76tn,

Looking at the equation for % Gain, and calculating for your example, assuming a date range where you start/end with $0 for simplicity, you'll have $100 for purchases, $150 for redemptions, and $0 for everything else. This is:

%Gain = (150 - 100) / (100 - 150) = - 1 = -100%

The %Gain equation really doesn't provide a meaningful number if you go negative on your basis.

[pm76tn]

Thanks Mark - I get the point now

appreciate your support