Re: Portfolio Yield Error

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In Reply to: Re: Portfolio Yield Error posted by Mark on July 12, 2004 at 23:37:11:

: : : : I believe there is an error when calculating the yields that are displayed when displaying a portfolio graph. I'm running the latest version, 6.8. Here is an example of what I'm seeing, not my actual numbers. Say the Portfolio Gain-H graph is used. The beginning date is 3/25/99 and the ending date is 7/9/04. On 3/25/99 the portfolio suffered a $10000 loss. The yield displayed for the entire length of the graph, the "gph" yield is 6.5%. I change the beginning of the graph to 3/24/99 which the portfolio had a big gain of $40000. The "gph" yield is now 5.8%?? No way can the yield be lower when I move back one day that had a large gain. The "gph" yield has to be more than 6.5%, not less.

: : : : I think this error was introduced after version 6.6. I went from 6.6 to 6.8, skipping 6.7. I believe the yield was acting correctly on 6.6. Its like the yield calculations is no longer considering the gain/loss the portfolio receives on the beginning day of the graph.

: : : Hi George,

: : : You're very observant. We did change the way the beginning date worked
: : : for the "gph" yield term. Prior to 6.8 the beginning information was the
: : : close of the prior day. So, if the yield was from 3/25, it would use the
: : : close of 3/24, and include any effects that happened on 3/25 itself. As
: : : of 6.8 we changed it to start with the close of the beginning yield date.
: : : In this example, it would start with the close of 3/25, ignoring any
: : : gains/losseson 3/25 itself.

: : : This was done to be more consistent with the overlay graphs. When your
: : : overlay graph starts on 3/25, that close is the first data point plotted, and
: : : everything is relative to that. You don't see the gain/loss on that 3/25
: : : day itself.

: : : So, for your example, when you've got the start date set at 3/25, you're
: : : not seeing the large $10000 loss on 3/25 in the "gph" yield. When you
: : : move the start date back to 3/24, you're not seeing the large $40000 gain
: : : on 3/24, but you now are seeing the large $10000 loss on 3/25, thus the
: : : yield decreases.

: : : Thanks,
: : : Mark

: : I feel the better and more consistent way to handle this is to change the overlay graphs so they also include the effects of the beginning date. Just as I described its inconsistent to include a beginning date with a big gain but see the yield drop. Also if I want to see the yield for say a year of time, a year would go from 3/25/03 to 3/24/04. Going from 3/25/03 to 3/25/04 is a year plus a day. To be consistent everything should, IMHO, INCLUDE the effects from the beginning date and the ending date. Besides a new day starts at midnight, and if the markets are open my portfolio undergoes changes so I should see those changes be reflected in the graphs, the yields, the overlay graphs, and everywhere else.

: : If you disagree with my opinion can you please make version 6.6 available somewhere on your website as I would prefer to switch back. Or maybe make it a user selectable option for the user to decide if he/she wants to include the effects of the beginning date.

: : George

: Hi George,

: Okay, I think you've convinced me. Let me think about it a little more, but
: I'll most likely switch it back for 7.0. Changing the initial value
: for the overlay graph instead does make better sense.

: I've posted version 6.7 here:
: http://www.fundmanagersoftware.com/programs/tempfm67.exe

: I'll leave it there for a couple of days. Version 6.7 worked the same
: way as 6.6 for this item.

: Thanks,
: Mark
: --

When you think about it, it pretty simple. If crap happens to my portfolio, show me the crap. Whether its the ending date, middle date, or beginning date show me want happens.

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