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1.
If your personal rate of return for a fund is much lower than the return reported by your fund company, you should probably take a look at _______.
When you've been buying and selling. Your timing probably accounts for the difference.
2.
Where can you always find your personal rate of return for a fund?
Neither. Fund companies rarely include personal rates of return on documents. You'll have to calculate the number for yourself by using a financial calculator or spreadsheet program, or by entering your portfolio in an online portfolio manager.
3.
When calculating your personal returns on a spreadsheet or financial calculator, why do you have to enter negative numbers for your contributions?
Because you're trying to figure out the internal return represented by the difference between your final balance and your beginning balance plus the money you've invested. Your returns are the gains you made on the money you invested. In other words, the returns you're calculating are for the final worth of your portfolio, minus the money you started with and invested during the year.
4.
If your personal rates of return for a fund are significantly lower than the reported return over the same period, _______.
You may be buying and selling at inopportune times. Just because your personal rate of return is lower than a reported rate of return over a given time period doesn't mean that you won't meet your goals. It may, however, mean that you're making trades at inopportune times, thereby sabotaging your results.
5.
When calculating your personal returns on a spreadsheet or financial calculator, you must enter _______ for your contributions.
Negative numbers. The returns you're calculating are for the final worth of your portfolio, minus the money you started with and invested during the year.
