How to measure yield?

Discussion in 'Trading' started by micahalcorn, Dec 6, 2007.

  1. I'm pretty sure I cave a solid understanding of IRRs and other conventional yield measures, but I can't seem to find a way to measure my trading yield. Does anyone measure their returns as an annual rate?
  2. Surdo


    Current Account Value - Account Value on 1/1/07 / Account Value on 1/1/07 X 100 = YTD Yield.
  3. Current account value doesn't take into account withdrawals or deposits during the time period. There fore it doesn't measure the return of each dollar with regard to how long it is actually in the investment. If I start out with $100, trade and earn another $5, my return is 5%. But if before the end of the year, I deposit another $50, my return looks like 55%.

    Am I missing something?
  4. avarus


    No, I believe you are correct.
  5. R0bert


    You need variable base account value and daily yields to make your calculations correct.
    It should look like in the attached file.
    Use Date, Account, Deposit/Withdrawal columns to fill your real data and enjoy daily yield and yield from the beginning calculated.
  6. I am struggling with the idea of adding daily yields, as you do in your last column, but I'm going to have to hink about that one.

    Anyway, my other issue is that I don't have daily historical data of my account value (only monthly statements). In that case, it still doesn't help.
  7. Surdo


    A brain with the ability to reason!

    If you make deposits and withdrawals throughout the year, then obviously you need to calculate your yield monthly.

    el surdo
  8. try using MIRR or XIRR in Excel
  9. R0bert


    You can substitute daily account snapshots with monthly, BUT
    if in addition you had made deposits/withdrawals not in the first or the last day of the month (exactly speaking not in the day of monthly statements you have) then you have no enough data to calculate your return precisely.
    Degree of approximation will depend on the size of made withdrawals/deposits relative to the total account sum and length of periods between D/WD operations and monthly statements.