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04-10-2008, 07:32 AM
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Calculating IRR?
Can anyone help me with calculating an internal rate of return for a portfolio? What tools do you use? So far the best I have found is to use is the XIRR function in Excel, but is pretty clunky. I want something that takes into account when I added to the investment, not just the overall investment versus the portfolio value. I think this is called the "Money Weighted Return" versus the "Time Weighted Return", which ignores when contributions were made.
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04-10-2008, 07:42 AM
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I don't have the calculation right off hand, but if you can find a financial management textbook it should be able to tell you. A financial calculator should be all you need. You need to know the weights of the stocks in your portfolio and the betas of each of those stocks I believe. It has been a little while though since I did it.
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04-10-2008, 07:44 AM
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This blogger seems to have good success with XIRR(). He provides a sample spreadsheet.
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04-10-2008, 08:00 AM
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Here are some threads
Investment return rate calculator Rates of return calculation - Early Retirement Forums
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04-11-2008, 06:38 AM
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I made up my own Excel spreadsheet using the XIRR function, and attached it to this post. Could somebody please sanity check it for me?
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