Fidelity Investments has an exclamation on their statements and their web site next to the field titled "Your Personal Rate of Return".
The exclamation states the following; "Your Personal Rate of Return is calculated with a time-weighted formula, widely used by financial analysts to calculate investment earnings. The calculated value reflects the result of your investment selections as well as any activity in the plan accounts shown. Other personal rate of return formulas may yield different results."
To better understand the term time-weighted we performed several searches. One of the searches produced the following definition from the site dailyvest.com: Time-weighted rate of return takes into account the amount of time an investor has been invested in a fund. It measures how well he or she performs in increasing the dollars that have been invested. Cash flows moving in and out of the fund do not affect the time-weighted rate of return.
The exclamation states the following; "Your Personal Rate of Return is calculated with a time-weighted formula, widely used by financial analysts to calculate investment earnings. The calculated value reflects the result of your investment selections as well as any activity in the plan accounts shown. Other personal rate of return formulas may yield different results."
To better understand the term time-weighted we performed several searches. One of the searches produced the following definition from the site dailyvest.com: Time-weighted rate of return takes into account the amount of time an investor has been invested in a fund. It measures how well he or she performs in increasing the dollars that have been invested. Cash flows moving in and out of the fund do not affect the time-weighted rate of return.
Based on this definition we are confident the time-weighted formula is perfect for our comparisons against the DJIA.
No comments:
Post a Comment