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Help me to answer this question on Avg Annual Return (%) YTD

Don Awalt

This calculation doesn't make sense to me, in the InvestingPortfolio/Performance report.

I have a stock that has done up this year so far - ROI % YTD in the report is shown as 13.76%, which seems correct as the the price has gone from roughly $495 to $563 so far this month. There have been no buys/sells/cap gains/dividends etc in the stock - only a change in price.

But - the same report shows "Avg Annual Return (%) YTD as 1791.78%.

That doesn't seem right to me - if I understand that calculation, it should be roughly the increase so far, times roughly 24 as we are halfway through the first month? So if the stock has gone up 13.76% in half a month, wouldn't the expected annual return be 13.76 x 24 (roughly) = 330%? Is that significant a difference (330% vs. 1791%) due to compounding?

I must misunderstand something. Thanks for clarifying this for me if you are able!

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Chris_QPW

Yes, it is compounded.

Roughly, take its value now, divided by what it was at the start of the year. Subtract 1. Divide by the number of days (16 as of today) time 100. That is the daily interest rate. Put that into a daily interest rate calculator with compounded interest calculated.

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Chris_QPW

Yes, it is compounded.

Don Awalt

Ah that works. Thank you for explaining that!

Jim_Harman

The high numbers you are seeing are annualized, i.e. they assume the YTD performance will continue at the same compounded rate for the rest of the year.

You can make the YTD Average Annual Return more reasonable by setting the date range for the report to Yearly and Current year. This will show the gain or loss assuming that the value does not change for the rest of the year. That is as good a guess as any for volatile securities like stocks or stock mutual funds, but not for money market funds or 401(k) stable value funds.