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View Full Version : Money-weighted rate of return and portfolio measurement


malccounting
Apr 2, 2010, 12:07 PM
I have a question,

When I look at my portfolio rate of return on TD Waterhouse it is calculated by money-weighted rate of return.

I am required to fill in the date the security was purchased, price purchased at... and then there is a spot for fees. Should I put my commission fee in? Is this a value that should be included in the calculation? And if so, should I include both the buying and selling fee?

Say it is $29 commission fee should I put in $58 because that is what it will eventually cost me in fees or do I consider fees a sunk cost and not include them at all for best measurement?

On top of that, in my basic portfolio screen should I update my avg price per stock on book value to include commission fees or do you always keep them out?

ROLCAM
Apr 2, 2010, 10:54 PM
All costs relating to investment
Brokerages should be included in your calculations.
At the start the brokerage is part of the cost of purchase.
At the end the brokerage is also
Part of the sale.