Return on Investment (%ROI)
Gabriel Elia
via web
Hi!
Can someone please explain to me how Moneydance calculates ROI? I'm a newbie, both to Moneydance and to personal finances. If I click on an investment account an go to the Portfolio view, it shows that my current % change is -4.1.If I use the Investment Performance report and select as starting date the date when I purchased the stocks, the ROI is -3.15. Can someone please explain to me the difference?
Comments are currently closed for this discussion. You can start a new one.
2 Posted by ljb on 06 Jun, 2010 01:47 AM
I can help with the easy half. On the portfolio view, the "% Change" is simply the percent change between the Cost Basis and the Current Value for that security. The current value is the number of shares owned times the price per share. Cost basis is a way of calculating the original cost to you of purchasing the shares, accounting for different buys (and sells) at different prices. So -4.1% means the security is worth -4.1% less than what you paid for it. But this doesn't take into account any dividends.
On the investment performance report, the Annual % (ROI) is supposed to give you an idea of the annual (yearly) return for you from this security. It is adjusted for a year, unlike % Change on the portfolio view. Like % Change, it accounts for the change in value of the security, but it also includes dividends. I think there is a lot more to % ROI calculation - there was a reference given in a forum post a while ago, and I don't pretend to understand how they get the number. (Hope you are using a recent release, like 2010r3 (751) because the % ROI number was broken in some pre-release versions.)
3 Posted by Gabriel Elia on 07 Jun, 2010 03:45 PM
Thank you. That clarified a few things for me!
Support Staff 4 Posted by Angie Rauscher on 18 Jun, 2010 03:08 PM
Gabriel,
The advice above on ROI is even better than that which I would have given you, he is correct that the calculations can sometimes be quite complex. I would also suggest you update to r3 (751) if you haven't done so already.
Please let me know if I can be of further assistance,
Angie Rauscher
Moneydance Support
Angie Rauscher closed this discussion on 18 Jun, 2010 03:08 PM.