Auditing portfolio performance

[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

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 .

hi bibi,
i promise you that if you figure it out, you will be able to call the bluff of most "financial" bloggers on the local scene..So there you go, an additional incentive to open a blank excel document and start some hypothetical numbers to practice to figure it out.

[karlmarx]

@opmi Nah not really. I consider myself more of a serious hobbyist.

@TTTI Thank you for your reply. I found out that getting past statements to be pretty expensive; $20+ (brokerage) to $30+ (CDP) per month. But I decided to pay for it anyway. Should have kept them. Do you mind revealing the auditor you used?

@Bibi I don't view myself as a pro as well. An amateur, really. While I agree that market experience is important, there are many with decades of experiences who has gone nowhere. My dad being one of them, he just likes to punt on 'hot counters.' So I will say that market experience, where one is constantly learning and improving, is what makes the real difference.

@soros My shares were kept in CDP. I will also need to use CDP statements as well as some data like rights issue subscription, dividends, and buyouts are not included in the brokerage statements. With regards to portfolio gain, it isn't much to speak about, especially in VB. Don't make me ma lu can? 

[TTTI]

@opmi Nah not really. I consider myself more of a serious hobbyist.

@TTTI Thank you for your reply. I found out that getting past statements to be pretty expensive; $20+ (brokerage) to $30+ (CDP) per month. But I decided to pay for it anyway. Should have kept them. Do you mind revealing the auditor you used?

@Bibi I don't view myself as a pro as well. An amateur, really. While I agree that market experience is important, there are many with decades of experiences who has gone nowhere. My dad being one of them, he just likes to punt on 'hot counters.' So I will say that market experience, where one is constantly learning and improving, is what makes the real difference.

@soros My shares were kept in CDP. I will also need to use CDP statements as well as some data like rights issue subscription, dividends, and buyouts are not included in the brokerage statements. With regards to portfolio gain, it isn't much to speak about, especially in VB. Don't make me ma lu can? 

KPMG is the auditor for my company in my line of work. (not investment holding company)

For my own investment holding company, I have an in-house, employed accountant, but have not and do not do audits.
Like a valuebuddy earlier said, for most companies, audits are more for compliance, i.e., you pay cos you have to, not because you want to.

The cost depends on the size and how much work is needed.
I think my company pays something like $40k for it.

[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.

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.

Thank you for your comments, I appreciate it.

I thought an audit will lend more weight to any performance claim. But if the cost is too high relative to my portfolio size, I might not want to do it as well. I haven't asked for quotes yet. But if the sum is low, like $2k, it seems ok to me.  

[TTTI]

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 .

hi bibi,
i promise you that if you figure it out, you will be able to call the bluff of most "financial" bloggers on the local scene..So there you go, an additional incentive to open a blank excel document and start some hypothetical numbers to practice to figure it out.

@ weijian: does that include me? heh

@ bibi: quick summary if you care to listen: just use XIRR.

[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.

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.

Thank you for your comments, I appreciate it.

I thought an audit will lend more weight to any performance claim. But if the cost is too high relative to my portfolio size, I might not want to do it as well. I haven't asked for quotes yet. But if the sum is low, like $2k, it seems ok to me.  

Sharing this with you since you mentioned about career doors. (and also since you asked nicely!)

My 2 cents worth: skip the audit. Even if it costs only $2k.
I've had 2 unsolicited job offers from the fund management (well 1 of them is not exactly, but related) in the past 14months.
I haven't had any audit done.
Just saying you don't need it.

[zz...]

Sharing this with you since you mentioned about career doors. (and also since you asked nicely!)

My 2 cents worth: skip the audit. Even if it costs only $2k.
I've had 2 unsolicited job offers from the fund management (well 1 of them is not exactly, but related) in the past 14months.
I haven't had any audit done.
Just saying you don't need it.

Think they read your blogs and can see how good your analytical skills and reasoning are, besides drs usually have good analytical and reasoning skills

[karlmarx]

@TTTI It must have been the good quality of your writing which attracted such unsolicited offers. The writing of my investment ideas are usually simple and short, not as detailed and lengthy as yours! So for any third party to pass positive judgement on my investing ability, without much skepticism, I thought audited performance figures will somewhat speak for themselves. The other part is what cif5000 mentioned which I also believe to be important; illustrating one's investing process and demonstrating that it is sustainable.

Thank you for your candid and generous sharing. I appreciate it.

I never liked maths and complex equations, which is why I never calculated my performance before. I only cared that money was made. Now I'm finally getting my hands dirty with excel...

[TTTI]

@TTTI It must have been the good quality of your writing which attracted such unsolicited offers. The writing of my investment ideas are usually simple and short, not as detailed and lengthy as yours! So for any third party to pass positive judgement on my investing ability, without much skepticism, I thought audited performance figures will somewhat speak for themselves. The other part is what cif5000 mentioned which I also believe to be important; illustrating one's investing process and demonstrating that it is sustainable.

Thank you for your candid and generous sharing. I appreciate it.

I never liked maths and complex equations, which is why I never calculated my performance before. I only cared that money was made. Now I'm finally getting my hands dirty with excel...

I'm not sure what you have in mind, and this is obviously not my field so I'm not sure I'm qualified to comment much.
But just to share what I know from asking...

If you have had no prior experience, you prob wouldn't start out by managing any money on your own at all.
Instead, you'd prob work in a team (tier 2 analyst or equivalent), so your role is more supportive/investigative and prob even administrative in nature (compiling data, getting presentations ready blah blah)
In which case, auditing personal performance figures is really unnecessary and prob a total waste of money. I honestly don't think headhunters and their clients would care. 
Unless you have figured out a novel way and you are trying to prove the novel way works...

Oh and also... similar positions in HK would pay at least 3 times (before bonuses) more than that in SG. I'm sure this info is of great interest!

[karlmarx]

@TTTI I'm still exploring possibilities. For now my focus remains on improving my ability to prospect investment ideas. Much more effort should be placed in mastering our craft than marketing it, right? I only hope to be able to market it if/when there is a need/want to in the future. I think I'm too old for analyst or equivalent positions.. but thanks for your insights.