31-12-2013, 11:54 AM
(31-12-2013, 10:23 AM)jovialger Wrote: Hi all
Like to check with you if I am doing the XIRR function correctly. I do not have a separate bank account to track available cash for stock investments, and just want to use XIRR to compute the returns from my stock portfolio (no idle cash).
Start of year 1 (1/1/xx): -(market value of portfolio)
Date: -(purchases)
Date: + Div received
Date: + sales proceeds
End of year 1 (31/12/xx): +(market value of portfolio) or A
--> Compute CAGR for year 1 using XIRR
Start of year 2:-(market value of portfolio or A)
repeat the process
Eng of year2: +(market value of portfolio or B)
--> Compute CAGR for year 2 using XIRR
---> compute another overall CAGR for whole investment period of 2 years.
Is the above method acceptable for my purpose?
Thanks for your advice.
Not really, xirr used in this way is more like computing the efficiency of trades. It does not compute the actual return of a portfolio over a year. Meaning it would not be comparable to STI/funds if that is wat u want...