Portfolio return: is it that simple?

A good accountant can inflate the balance sheet by 30% (c)





Good afternoon, dear hobbyists who have brokerage accounts or are simply interested in finance and / or investments. Since you see this article, it means that you are probably subscribed to "Finance in IT", which means that some of you probably already have individual investment accounts (IIA) opened with various brokers. So, most likely you have a reasonable question - what is the profitability of my investments in %% percent per annum ? The question, as it turned out, is not so simple.





Disclaimer : This article is solely about investing, not active trading. We also leave the tax benefits for IIS outside the brackets.





If the money is on the deposit, then such a question, as a rule, in most cases does not arise at all, since deposits have a fixed interest rate. Although, of course, there may be more exotic cases that we will leave out of brackets (with stepped%-rates, which depend on the amount and duration of funds in the account, with interest only on the minimum balance, which is more typical of savings accounts and debit cards , with a separate%-rate for each account replenishment, etc.).





Therefore, for a regular deposit, it does not matter when and how much you put on it and how you replenished it - the%-rate is fixed and expressed in our usual "percent per annum"





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01.01.2020





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01.02.2020





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1 1 : 4*102 – (100 + 3 * 99) = 11





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  • 1: (100 + (100 + 3*99))/2 = 248,5





  • 2: (100 + (100 + 3*99) * 4)/5 = 337,6





  • 3: (100*31 + (100 + 3*99) * 90) / (31 + 90) = 320,9





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  • 1: (11/248,5) * (365/121) *100% = 13,35%





  • 2: (11/337,6) * (365/121) *100% = 9,82%





  • 3: (11/320,9) * (365/121) *100% = 10,34%





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= (2/100) * (365/121) *100 % = 6,03%





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= 306 – 297 = 9





= (9/297) * (365/90) * 100% = 12,29%





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(6,03 * 100) + (12,29 * 297) / (100 + 297) = 10,71%





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01.01.2020





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01.02.2020





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Actually, here I will cut off my story, since the current results obtained are not at all what I expected when I started writing this article) The initial idea was to write a parser for the broker's reports and “just” calculate the return on investment. The parser was quickly and successfully written, but at the step "just calculate the profitability" a stupor arose and this article was born.





Therefore, I propose to discuss in the comments and share your experience: in what way do you consider the profitability of your investments? Surely I'm not the first one to ask such a question ...








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