Investment performance Report - change the return calculation so it’s accurate for short timeframes.
The Investment performance Report Ave. Annual Return (IRR) is meaningless for time periods less than one year. For example, The Year to Date reported IRR for my account is 13.7%. the actual YTD return is 0.4%
Look at how Fidelity does it with “Money-weighted rate of return” as they label it.
Their description:
This measures your overall performance for the time period specified. It reflects any growth and income generated by your investments, fees, and the impact of cash flows, such as deposits and withdrawals.
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One way to see realistic YTD numbers with the Investment Performance Report if you have volatile securities is to set the set the Date range to Yearly and Current year. Assuming that you have not recorded any future transactions or security prices, the calculation assumes that the value of each security will be flat for the rest of the year.
If you set the date range to YTD, it assumes that any gains or losses so far will continue at the same rate for a full year. This may be a good assumption for money market funds or stable value funds, but probably not for stocks.
Another measure for YTD performance is the ROI (%) YTD column in the Portfolio views. This has some limitations, see this discussion
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