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The Money Mustache Community
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Investor Alley
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personal return vs fund return
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Topic: personal return vs fund return (Read 1498 times)
FirePaddle
5 O'Clock Shadow
Posts: 63
personal return vs fund return
«
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/
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solon
Handlebar Stache
Posts: 2363
Age: 1823
Location: OH
Re: personal return vs fund return
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Reply #1 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.
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FirePaddle
5 O'Clock Shadow
Posts: 63
Re: personal return vs fund return
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Reply #2 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.
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personal return vs fund return