This week, we look at how investors can measure and track their own performance.
Here’s the excerpt:
If you manage your own assets, knowing how
well you did — or didn’t do — is crucial to your success. To do this,
you need a reliable method to measure yourself. Some of you may
discover that it’s cheaper, more tax-efficient, to simply index; you
may ultimately generate better returns by avoiding stock selection and
Like most people, you think you know what your
performance is. But I’ll bet you cannot tell me what your returns were
for the past one-, five- and 10-year periods. How did you do last month
and last quarter? How have you fared relative to the S&P 500, the Russell 2000 or the Dow?
If you cannot answer these questions, you know far less about your own performance than you thought you did.
The basic tool to help answer these questions is the spreadsheet. We start with an Excel template, and today we will review several ways by which you can evaluate your returns. You will be able to compare how well you are doing relative to the benchmarks over any time period you like (daily, weekly, monthly, quarterly, etc.)
Download Excel template
Apprenticed Investor: Trading Diary, Part II
RealMoney.com, 10/20/2005 7:08 AM EDT