Feb 10, 2019

Cory Diary : Computing Portfolio Size

To get portfolio size, the straight forward answer is to do a value tally and over time we will have a trend. What-if we don't track them closely and have fund injection that constitutes 50% of the fund increase or we do a reverse. Now you see what I am getting ?

One of the most daunting task for me is how to compute years of investment in annual format to reflect the size of the portfolio easily. The goal is to give the right impression of the fund size. We need not be rocket science in it to have perfection but is necessary to give a right picture.

The next question some one may be asking is why care about portfolio size. Wouldn't the various performance tools take care of it to give us a reflection of fund performance ? And that's the interesting part I have been deliberating on.

Fund Injection

In a negative year where there are sizable fund injection. I am being careful with the word "sizable". Performance indicator can zoom down pretty hard on you and this could be the exact opposite of buy low sell high idea. We do want to buy when market is low.

Fund Diversification

Let's face it. If we aren't very strong in analysis, a handful of stocks aren't going to cut it. If our wealth accumulation is from normal salary, the fluctuation can be rather quite daunting to many. So at appropriate size one maybe decide to adjust their portfolio towards diversification. Is always imo a bad idea to concentrate to just a handful for most.


We aren't going to be able to bring money to our grave. So once we are strong financially, risking or spending enormous amount of energy on it to grow them faster seems not worthy use of our limited time in the world. So our portfolio strategy will change in different phases.


So how to do it for retailers ? Actually quite simple. Just take the Absolute P/L($) and divide by XIRR (%).  For example, if my return is $30,000 for 2016 and my XIRR for that year is 8%. Estimate portfolio size will be $375,000. Tell me what you think.

Ok ! Baby time .



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