Quicken does not calculate ROI correctly

Marcus Libkind
Marcus Libkind Member ✭✭
edited November 2018 in Investing (Windows)

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?

Comments

  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited October 2018
  • Marcus Libkind
    Marcus Libkind Member ✭✭
    edited October 2018

    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
    NotACPA SuperUser, Windows Beta Beta
    edited July 2018


    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.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    edited July 2018


    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.
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    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.
    QWin Premier subscription
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited July 2018


    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". 
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
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