Effective measure of fund performance?

toolateforsums

I've monitored my pension fund , and other investments values to understand how they are doing, but recently I've come up with what i think is a better measure of their success or failure:

How much has each £ of pension actually cost me from my fund.

So if i have withdrawn £100k ,  and my fund had gone down by £100k , then each £1 of pension would have cost me £1.

Similarly if i have withdrawn £100k  and my fund had gone down by £50k , then each £1 of pension would have cost me £0.5 . I think this is a good measure as it takes into account fund value against how much has been withdrawn . All figures would be net after all fees and dividends.

Does this look sensible? If not , what other measurements, other than annual performance are you using?

Qyburn

toolateforsums said:

So if i have withdrawn £100k ,  and my fund had gone down by £100k , then each £1 of pension would have cost me £1.

Similarly if i have withdrawn £100k  and my fund had gone down by £50k , then each £1 of pension would have cost me £0.5 

Presumably you mean compared to last year or similar. Otherwise it's fairly obvious that taking out £100 reduces the balance by at least £100.

Comparing year on year you'd want to correct for inflation as well.

Personally I'm thinking along the line of a running target. Starting from the original value, the value that we estimated would have a good chance of meeting our needs. Each year look at starting value corrected for inflation to today's date. Is today's value more or less than thst target.

Problem with just tracking year on year is that you may get one or more really good years, followed by a minor dip. Year on year it looks bad. But tracking from the start may show you're still ahead overall.