Conference nyoss1::market_investing

    Hi,
    
    I use QUICKEN for tracking purchases, sales, capital gains/losses, etc.
    
    I also use TeleChart 2000 for doing technical analysis, comparisons,
    etc.
    
    fyi,
    
    /jimm

    Quicken for me also

    Talking about using Quicken...
    
    I know how to calculate "account" performance using Quicken. But, if
    you have a portfolio of funds (ie. accounts), how do you calculate the
    *over-all* portfolio performance/return? 
    
    Mike

I use spreadsheets I have developed over the years (starting on a Rainbow) for
Lotus/QuattroPro/and_now_Excel. What I really have developed is a total
household accounting package ranging from a rolling 10 year monthly budget
through electronic checkbook through investment portfolios/analysis to taxes. 
All integrated and all tailored to my personal needs.  Once you understand 
accounting/bookeeping, finance, investments, and spreadsheets, creating and 
tweaking the package is kind of fun.  And, importantly, I have a running 
snapshot of how my tax situation will look at the end of the year.  That way, I 
can make adjustments before Dec31 as need be.

As for portfolio performance.....
To keep thins simple (I guess that is a point_of_view statement), all of my
analysis on investments come down to "annualized ROI".  Obviously, that is not
easy when you are investing and cashing in throughout the year. 

But.....  money is just a way of keeping score and I want to know how well I am
doing in the game.  I know how much annualized ROI I can earn in, for instance,
in an S&P 500 index fund.  If I am as smart as I would like to think I am, I
should be able to beat the S&P.  The S&P is reported out as "annualized ROI
including dividends", so that is how I track MY portfolios/investments.  

And I manage four family portfolios and they ALL, consistently beat the S&P
500.  If a lowly CSS Product Manager can do that, it makes you wonder why 
people continue to invest in Mutual Funds that DO NOT beat the S&P 500.

As Always, For What It's Worth....
Dave

    re: .4. Quicken has a Portfolio function that shows the return for the
    portfolio. I'm using V3 and am certain I don't fully-utilize it. I'm 
    not sure if it will do everything you want, but it has met my needs
    thus far.
    
    

    There's also Reality's WEALTHBUILDER or Reuters version of the same.
    Money magazine usually has an ad on this sw. You set up accounts within
    the sw by portfolio and connect to a service offered by Reuter's and it
    will automatically update your portfolio(s).
    I don't recommend it...Quicken is absolutely the best by far

Let me describe how I am doing it with spreadsheet.
For each profolio, I keep the following statistics:
	S(t) = SUM(...) of values at time t
	B(t) = basis for comparison
	P(t) = S(t)/B(t) shows the performance at time t
Initally, B(0) is equal to S(0), the value of your investment at time 0.
B(t) is updated only when you add things into or take things out of
the profolio.
Suppose at time T, you add $X cash to the portfolio, such that
	S(T) = SUM(...)
	S(T+1) = SUM(...+$X)
Then B() is updated as follows
	B(T+1) = S(T+1)/P(T)
Although it looks complicated, this is really quite simple using a
spread-sheet.  Of course, you need some automated way to get all the
stock values into the spreadsheet to make it reasonable to do this
on a regular (e.g. daily) basis.
The idea is to use this to compare to some standard index, such as DJIA or
S&P500 to keep track of your own performance as a money manager.

My questions are:
Is the above formula "correct"?
Are there better ways that are more flexible - the above method requires
me to set something up from day 1 for each portfolio I am interested in
measuring.
	

    
    	Anyway you want to do it is fine. One caveat - looking at YOUR
    performance daily is a waste of time. We do not trade. If we did
    we'd be traders, not investors; besides the commisions would eat
    you alive.
    
    	Look at your performance monthly. I use Quicken to "establish" my
    portfolios values the first Friday of each month. This gives a nice
    historical view, and also makes it easy to track funds as well as
    stocks and money instruments.
    
    	This then creates a discipline for corrective action on just a
    monthly basis. You do not get "caught up" in market hysteria, and
    therefore tend to rely on your original reasons for investing in the
    first place (ie. value, momemtum, bottom-fishing, etc.).
    
    	As Dave noted, this is probably why most of us do far better than
    the S&P 500, and most money managers - we don't panic, and we don't
    trade. And our focus is longer term. These guys (the MMs) have
    quarterly numbers to make - we do not. :-)
    
    			the Greyhawk

    *Daily* updates?  Why bother?  Surely there is more to life than
    grinding through and mulling over all those numbers each day.
    
    Choose you allocations, pick your individual issues, and let
    them ride, I say.  Check on them once a month or so (maybe weekly),
    make minor adjustments, and set it all aside for another month.
    To fuss over this any more often isn't necessary for the long
    term investor.
    
    -Jerry
    
    
    

    I track my portfolio weekly via spreadsheet. I update it manually as I
    feel it forces me to think abount each holding for a few seconds at
    least.
    
    I never make abrupt changes in my portfolio allocations. Any changes are
    made gradually regardless of the direction of those changes. Most of my
    holdings of individual stocks and mutual funds are held for the long
    term.
    
    I satisfy my "trading" appetite by selling OEX puts and calls.
    

The point that there is no need to monitor performance on daily basis is well
taken.  You can check your performance month by month.  But if you want to
measure your performance against some benchmark over a longer period, within
which you put money in and take money out, you still need to establish some
way of doing this.  It is like your own open-ended mutual fund, and it would
be nice to be able to keep a historical record of its NAV over time.