Auditing portfolio performance

[karlmarx]

It has been 6-7 years since I started investing. I recently thought of 'certifying' my portfolio performance by way of an audit. I'm not sure, but hopefully it will open more career doors. However, I'm not finance-trained so I hope fellow VBs could offer some help. Specifically, I have a few questions:

1) All my trades are done on one brokerage account, and all past transactions can be viewed online. Will it be necessary to have ALL my monthly CDP and monthly brokerage statements as supporting evidence? I didn't think to keep them in the past.

2) Could the calculation be performed by myself or do I need to hire someone, say an accountant, to do so? And then present the calculation to the auditor? Or does the auditor perform the calculation?

3) What will the auditor actually require? 

4) How much does a small audit outfit charge for such services?

Thank you all in advance.

[opmi]

Wah...going pro soon....

[TTTI]

It has been 6-7 years since I started investing. I recently thought of 'certifying' my portfolio performance by way of an audit. I'm not sure, but hopefully it will open more career doors. However, I'm not finance-trained so I hope fellow VBs could offer some help. Specifically, I have a few questions:

1) All my trades are done on one brokerage account, and all past transactions can be viewed online. Will it be necessary to have ALL my monthly CDP and monthly brokerage statements as supporting evidence? I didn't think to keep them in the past.

2) Could the calculation be performed by myself or do I need to hire someone, say an accountant, to do so? And then present the calculation to the auditor? Or does the auditor perform the calculation?

3) What will the auditor actually require? 

4) How much does a small audit outfit charge for such services?

Thank you all in advance.

I don't know of any 1 individual who gets it audited on a personal basis.
But if you had invested via an investment holding company, then:

1) Yes. You need everything. I don't think your brokerage account would have all past transactions dating from 6-7 yrs back.

2) You do the calculations, or get an accountant to do so. An auditor doesn't do your accounts for you, they... audit them.

3) EVERYTHING. You can't ask them what they require. The more the better.

4) For auditing something as small as a single person's investment? Probably around $2k or so. But not sure if you're talking about multi past years, would the fees increase.

[Bibi]

Wah...going pro soon....

6 to 7 yrs investing did not go thru a full market cycle. so cant really consider a pro in my dictionary.

[soros]

How much did your portfolio gain in value over last 6 years ?

If the shares are kept in broker account , you just need the year end statements to see the value at end of each year.

[Bibi]

How much did your portfolio gain in value over last  6 years  ?  

If the shares are  kept in broker account , you just need the year end statements  to see the value at end of each year.

I don know how to calculate portfolio gain as the salary savings coupled with the gains from investment just confuses me. Taking into account of my total savings which includes salary plus investment gains over 11 years. The investment portion is 38% of total savings. I have been maintaining 40 to 50% cash over the past few years.

Commenting that a person who didnt went thru a full market cycle is not a pro does not imply i am a pro. Will u put yr money in one who didnt go thru a full market cycle?

[weijian]

hi bibi,
i suspect forumer soros is not directing the question to you.

As for your question of calculating investment returns - there are generally 2 ways - NAV and XIRR. Your portfolio standing is abit similar to me, and i use the XIRR way (my tabulation interval is once every 6 months), and choose it because it uses less columns than NAV calculation. It includes overall cash and cash injections as the "hurdle". More resources within VB for you to read up and understand how you can make the calculations you want:

XIRR: https://www.valuebuddies.com/thread-7818...#pid134038
NAV method: https://www.valuebuddies.com/thread-1268...l#pid11592

[Bibi]

hi bibi,
i suspect forumer soros is not directing the question to you.

As for your question of calculating investment returns - there are generally 2 ways - NAV and XIRR. Your portfolio standing is abit similar to me, and i use the XIRR way (my tabulation interval is once every 6 months), and choose it because it uses less columns than NAV calculation. It includes overall cash and cash injections as the "hurdle". More resources within VB for you to read up and understand how you can make the calculations you want:

XIRR: https://www.valuebuddies.com/thread-7818...#pid134038
NAV method: https://www.valuebuddies.com/thread-1268...l#pid11592

Thanks for the link weijian. I know those were discussed extensively and i actually tried pondering over it for about half an hour but they still didnt get into my head .

[newborn1000]

Does certifying portfolio performance really turn you pro?

Maybe should find out more before spending money on auditing......

[cif5000]

It has been 6-7 years since I started investing. I recently thought of 'certifying' my portfolio performance by way of an audit. I'm not sure, but hopefully it will open more career doors.

I don't have a career in investing but I did have a few thoughts about it. 

IMHO, an audited account is more for compliance. There's a cost to it (call to get a quote). It is also good for external parties who make decision with one eye closed. 

Since you don't have to deal with compliance and you will have to have face-to-face interview for any career options anyway, an unaudited account may be enough. Of course, if the interviewer choose to "audit" you, you should have the documents ready.

An unaudited account can be supplemented with other more useful information such as your investment process, case studies of success and failure, and lessons learnt. I'm definitely more interested in those as the "future performance" depends on them.

2 cts.