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Learning, Sharing, and Teaching => Investor Alley => Topic started by: FirePaddle on October 21, 2014, 11:53:25 AM

Title: personal return vs fund return
Post by: FirePaddle on October 21, 2014, 11:53:25 AM
Hello,

This was confusing me recently when I noticed that my personal return was way less than the fund return, and I started to become suspicious of the investment firm. I now understand that if I would look this up during a more positive quarter, the opposite would likely be true.

Vanguard explains it well.  I hope you find it useful too.

http://vanguardblog.com/2011/05/18/investor-returns-versus-fund-returns/
Title: Re: personal return vs fund return
Post by: solon on October 21, 2014, 02:46:51 PM
Excellent explanation. It's because the investor is investing a little bit each month throughout the period. I never thought of that.
Title: Re: personal return vs fund return
Post by: FirePaddle on October 21, 2014, 02:54:35 PM
My take home was that the personal return is highly influenced by the positive or negative returns earlier in the period, since that money is sitting there for so much longer.