Re: Trouble with graphing and reporting % gains

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Posted by Mark on September 11, 2007 at 13:49:01:

In Reply to: Re: Trouble with graphing and reporting % gains posted by Jon on September 11, 2007 at 11:27:26:

: Thanks for the response Mark. I only have a $0.10 distribution, so I know that's not it, and the report date is definitely before the first purchase. I did have multiple deposits into the cash account, so it sounds like this is the issue. Is there any way to correct this? I tried filtering the report to include only stocks, but for some reason I was then shown a gain of 34%.

Hi Jon,

To help figure out why the %Gain-I is reporting the way it is, create a custom report with these fields:

Value (beginning)
Purchases (between)
Reinvested distributions (between)
Redemptions (between)
Distributed distributions (between)
Value (ending)
%Gain-I (between)

Then, please look at the formula for %Gain-I:

http://www.fundmanagersoftware.com/help/def_percgaini.html

The formula is:

%Gain-I = (End_Val + Redemptions + Dist_dist - (OOP Purchases + Beg Value))/(OOP Purchases + Beg Value)

The only figure in this equation that you can't get directly in a report is 'OOP Purchases'. You can get that by subtracting Reinvested distributions (between) from Purchases (between). Purchases (between) includes both OOP Purchases and purchases made from reinvestments. For the %Gain-I calculation, only the OOP Purchases are used. Doing this calculation should help you see why/how the %Gain-I is reporting the way it is. Then, you can decide if you want or need to change something.

As an aside... %Gains can often be misleading, as they are not time weighted. They are a nice simple calculation of what you gained, but don't take into account how long you took to earn (or lose) that amount of money. A more meaningful performance metric is actually the ROI yields, which are both time and value weighted. This figure is also available on the Portfolio Performance report, and in several other places in the program.

Thanks,
Mark
--
Fund Manager - Portfolio Management Software

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