How'm I doin'?

Dollar-weighted returns give you the answer.

Paul Kaplan 7 August, 2014 | 6:00PM

Back in the late 1970s and early 1980s when I was a college student in New York City, Mayor Ed Koch would regularly ask New Yorkers, "How'm I doin'?" As investors, we often ask this question of our funds as well as of ourselves. We usually answer this question using one or more performance metrics. Some of these numbers appear prominently in reports and in fund advertising, while others must be calculated.

If you have the right data-management tool, such as Microsoft Excel, and know how to use it, you can do the calculations yourself. In this article, I review several performance metrics, explain how they are calculated, and explain which ones apply to funds and which ones to investors.

Total returns over short periods

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About Author

Paul Kaplan

Paul Kaplan  Paul Kaplan is Director of Research for Morningstar Canada.

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