Quicken does not calculate ROI correctly

Marcus Libkind

I don’t think that Quicken Deluxe 2018 R10.11 calculates the ROI
correctly. Let me explain.

I buy a mutual fund for a total of $10,000. Over the course of time it
pays dividends of $2,000. Its current market value is $15,000. I would calculate
the ROI as (15,000-10,000)/10,000 = 50%, but the result given in Investing
>> Portfolio for ROI will be different. Note: Those are made up numbers but give the gist of the problem.

Can anyone explain this?

Sherlock

If you haven't already, you may want to review: https://www.quicken.com/support/about-key-investment-performance-calculations-used-quicken

Marcus Libkind

That was a very helpful link. I now understand what is happening.

In that link it describes IRR. That would be a very useful number to get, but I don't see it as one of the customizable options under Investing >> Portfolio. Is there a way to get it from Quicken?

NotACPA

Marcus Libkind said:

That was a very helpful link. I now understand what is happening.

In that link it describes IRR. That would be a very useful number to get, but I don't see it as one of the customizable options under Investing >> Portfolio. Is there a way to get it from Quicken?

Marcus,
The return on your hypothetical $10K investment is, actually, $17K.  $5K in cap gains and $2K in dividends.

Rocket J Squirrel

Marcus Libkind said:

That was a very helpful link. I now understand what is happening.

In that link it describes IRR. That would be a very useful number to get, but I don't see it as one of the customizable options under Investing >> Portfolio. Is there a way to get it from Quicken?

The columns for IRR are called Avg. Annual Return.

Jim_Harman

Note that the av annual return numbers are annualized, so they will be larger than you might expect if the analysis or holding period is less than one year.

NotACPA

Marcus Libkind said:

That was a very helpful link. I now understand what is happening.

In that link it describes IRR. That would be a very useful number to get, but I don't see it as one of the customizable options under Investing >> Portfolio. Is there a way to get it from Quicken?

OOPS, that should have been "is, actually, $7K".