Re: very high numbers for yield

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Posted by Mark on August 29, 2006 at 14:07:50:

In Reply to: Re: very high numbers for yield posted by Jeffrey on August 29, 2006 at 13:51:43:

Hi Jeffrey,

: thanks for the link, but equations are not the easiest thing for me to make sense of all the time.

Understood...

: - when you speak of ROI calculation, is the same as the number given as "yield" in the 'portfolio performance' report.

Yes, the "Yield" column in the Portfolio Performance report is an ROI yield. You can select "Help / Help on Report" from within any report window to get a description of the columns in each report.

: -i do use a default cash account. which leads to this question, for stock B:, why is the yield so high if the stock only produced for a couple of weeks and the cash was in the cash account, or invested elsewhere the rest of the time.

Having a default cash account doesn't affect the yields for another investment in that sub-portfolio, but it will reflect in the overall portfolio yield.

: - isn't a 13358% return for a stock held for 2 weeks having undue influence on the portfolio total yield number?

No. When calculating the portfolio yield, the high investment yield is weighted by the dollar amount, and the amount of time it was invested at this rate. If you look at the portfolio yield with this investment combined with a cash account that held that money for the rest of the year, what is the portfolio yield? It should be much lower, assuming your cash account was yielding a regular amount. Everything is time and value weighted in the ROI calculations, so since you only experienced that high yield for a relatively short time, it will only have so much influence on your overall portfolio yield.

Also, while I have your attention... I sent an email to your gmail account with some other questions. Could you check that account?

Thanks,
Mark
--
Fund Manager - Portfolio Management Software

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