Calculating return on shares

stevep99

I have a portfolio of shares which I have gradually been adding to since about 2001. I sometimes wonder whether the return I am getting is better than if I had simply just put the money in a high interest savings account. Does anyone know of any software or website tool that allows me to calculate this?

I know there are plenty of portfolio tools around, which tell you how much profit and loss you have made, but this is not the same as it doesn't take into account the length of time the investment was held, and what would have been the equivalent interest earned.

Does that make sense? In simple terms, I suppose what I want is the equivalent of an APR value?

kingmonkey

http://www.experiglot.com/2006/10/17/how-to-use-xirr-in-excel-to-calculate-annualized-returns/

The above website provides a guide. It basically uses xirr function in ms excel to calculate the annualised internal rate or return.

Milarky

You would set up a spreadsheet showing whenever you paid something into the holdings (eg purchases) and deducting any 'payments' out (sale of shares) that were made.

You then work forward to the current value of the holding - as of the current date. Put any old 'interest' rate in to start - and copy this same rate down against all transactions - and the calcuulated value will differ from the current value. Adjust the rate (of interest/return) until the difference virtually disappears and you have found the average rate of return.

NB Dividends are part of the rate of return - so if these were paid out as cash (rather than automatically revinvested) you'd enter them as 'withdrawals'

stevep99

I checked out that spreadsheet function kingmonkey mentioned.
Cool, seems to give exactly what I want. Unfortuntely I haven't got a definitive list of dates of deposits & withdrawals so I had to make some guesses... but I came out with a figure of about 2-3 %, which is obviously worse that a deposit account. But then with the current financial crisis maybe it's not actually too bad! I should have calculated it last year I guess :-P

RayWolfe

You should keep that list, it's important.
If you had investments that were not in ISAs you may need such info for the tax man.
I would recommend that keeping buying and selling dates amounts and values are vital to know what is going on.