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Can Return on Investment be calculated on investment performance reports?

sohard_98

I find the Annual Rate of Return calculation to be of little value compared to a more common (and straightforward) ROI calculation. Is there any way to have ROI calculated and presented versus ARR?

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Sherlock

I suggest you consider using a customized Portfolio view (press Ctrl + U).

Jim_Harman

I believe the ROI calculations in the Portfolio views for individual securities are correct (or maybe I should say "useful") but that the calculations are sometimes incorrect (not useful) at the account level. Others may disagree. Please see this discussion
https://community.quicken.com/discussion/comment/20048358

q_lurker

sohard_98 said:

I find the Annual Rate of Return calculation to be of little value compared to a more common (and straightforward) ROI calculation. Is there any way to have ROI calculated and presented versus ARR?

To better address your question, I would find it helpful for you to comment on why you find the AAR value "to be of little value". I find AAR to be more reliable and representative across a breadth of securities and accounts. ROI as computed by Quicken I find to be less helpful because it involves sold lots as well as current holdings. As computed by Quicken, it may be less meaningful than some expect. For a buy-and-hold investment strategy, ROI may be reasonable.

Mark1104

I agree with @q_lurker

sohard_98

My question was if there was a way to get an ROI calculation presented on Quicken reports versus ARR. It looks like the answer is "no" although posts have been vague on providing this specific answer.

As to reasons I find ARR less useful, a few examples. Using the same time period for a security, a simple ROI calculation (Gain/Initial Investment) yields a much different result, making me question the ARR calculation. Real example: As of 7/17/20, investment A basis is $25,546. On 7/16/21, ending amount is $40,094. ROI = 56.9% whereas Quicken report using ARR shows 60.2%. Another example is a stock bought 4 times over a period from 11/3-11/9/20 and sold on 12/11/20. Basis is $47,106 and sale amount is $53,448. The ARR shown is 289.14% whereas using the same ROI formula, the ROI would be 13.4%. I find that borderline ridiculous. What am I missing?

Jim_Harman

You are correct that Quicken has no report that shows your ROI. However you can customize an Investing > Portfolio view to show ROI in dollars and/or percent for various periods. My experience is that Quicken's calculation is accurate for individual securities but less so on the account level. See the discussion I linked above for more information.

But I suggest you take another look at the Investment Performance Report. It uses an Internal Rate of Return (IRR) calculation, which is the equivalent of the annual interest rate a savings account with daily compounding would have to have to match the performance of the selected investments, given the same cash flows in and out. It matches Excel's XIRR calculation.

For your first example, assuming there were no cash flows in or out, if you set the date range to 7/17/20 to 7/16/21, it would start with the market value (not the cost basis) of investment A based on the previous day's closing price (7/16/20) and end with the closing value on 7/16/21.

Because the calculation is annualized, the result may not be very useful for situations like your second example, where the holding period is less than one year, because the calculation assumes the performance will continue at the same rate for a full year.

Mark1104

I agree wholeheartedly with everything @Jim_Harman wrote.

Note that ARR is ANNUALIZED rate of return; if you made $6000 on a $47,000 investment in under a month, then it is NOT borderline ridiculous for the answer to be 289%. Had you held the investment for a year and had it maintained its rate of appreciation, you would have almost tripled you money.