|
Where
you are trying to go — Investment Planning:
Investor's
CalcStation | How
you are going to get there — Portfolio
Management: Investor's
WorkStation | How
well you have done — Modified Dietz Performance
Calculator: PerfCalc
| What you need to think about, know, do, have, use,
forget, and avoid — Investing Principles
and Perspectives: In
My Opinion | Home
| Contact
Us | Free
30-Day Software Trials | Prices/Order
mhj3.com
Investing Philosophy |
mhj3.com
Audio Introduction Excerpts In
Brief 
| Modified
Dietz Any
two user selected MVs may be used to define a performance calculation range to
calculate Modified Dietz.
User entered cash flows within the analysis range will be considered in
the performance calculation. Geometric
Linking Any
two user selected MVs may be used to define a performance calculation range to
calculate Large Cash Flows Geometric Linking. Market
Values entered on the date before Large Cash Flows (Contributions/Withdrawals),
define geometric linking subperiods. Compare
calculation results as you toggle between the Modified Dietz and TWRR/Geometric
Linking tabs. |
In
Detail Analysis
Range The
first user entered dated Market Value is calculated as the SMV and the second
user entered dated Market Value is calculated as the EMV. In
the case of a new account, the first entry can be entered as an Investor Contribution
type and will be treated as the SMV if selected as part of an analysis range. Whatever
user entered MV is selected as the starting SMV, PerfCalc takes that user entered
end of day Market Value and uses it as the starting analysis range value for the
first day of the analysis which is the next day. - SMV
date day will not be part of the calculation.
For
example, for a July analysis range, MV1 would be entered on 6/30; the end of day
closing market value. MV2 would be entered on 7/31; the end of day closing market
value on the last day of the month of July; the end of the analysis range. If,
for some reason, you wanted to include 6/30 in the analysis range, you would start
by entering a MV for 6/29.
If
you get a June bank statement dated 6/30 and a July bank statement dated 7/31,
how many days does the 2nd bank statement cover? It
covers every day in July or 31 days; from the 6/30 statement end of business day
balance to the 7/31 statement end of business day balance; all
activity from the beginning of 7/1 up to the end of day business, July 31st. The
change in your balance between the 6/30 statement end of business day balance
and the 7/31 statement end of business day balance happened over 31 days. The
withdrawals and deposits made during the day on 6/30 are reflected in the end
of business day balance in the June 30 statement, not in the July statement. The
withdrawals and deposits made during the day on 7/31 are reflected in the end
of business day balance in the July 31 statement, not in the August statement. The
end of business day balance in the July 31 statement is the SMV for the month
of August.
Cash
Flow Types Contribution,
Withdrawal, and Advisor Fees Taken types are assumed to occur at end of day and
if a market Value is entered on that date, they are included in that days' Market
Value. Modified
Dietz Any
two user selected MVs may be used to define a performance calculation range to
calculate Modified Dietz.
User entered cash flows within the analysis range will be considered in
the performance calculation. Geometric
Linking Any
two user selected MVs may be used to define a performance calculation range to
calculate Large Cash Flows Geometric Linking. Market
Values entered on the date before Large Cash Flows (Contributions/Withdrawals),
define geometric linking subperiods. 
Geometric
Linking vs. Daily Valuation The
difference between Geometric Linking and Daily Valuation methodologies is
simply one of degrees; Geometric Linking, enter a Market Value @ large
cash flows only, and Daily Valuation, enter a Market Value @ all cash flows.
In
most cases, entering a Market Value on the dates prior for all cash flows is not
worth the effort when comparing the results to a Geometric Linking calculation. Think
of each methodology from Modified Dietz, to Geometric Linking, to Daily Valuation
as zooming in from one Modified Dietz calculation for an analysis range, to a
few Modified Dietz Large Cash Flow Calculations within the same analysis range
geometrically linked, to many Modified Dietz calculations for all cash flows within
the same analysis range geometrically linked; the more the Modified Dietz calculations
within an analysis range, the better, the more precise the answer.
Cash
Flow GIPS
defines a 'Cash Flow' as a cash flow of cash and/or securities that is investor
initiated. - Investor
Contribution
- Client
initiated addition of capital or securities to the account.
Investor
Withdrawal
Advisor
Fees Taken The
calculation of Advisor Fees Taken
depends on the source of the funds; directly from the client to the advisor or
to the advisor from the account. - If
fees are paid directly from client to advisor (not through the account) select
cash flow 'Type,' 'Advisor Fees Paid.'
- If
fees are paid out of the account, select cash flow 'Type,' 'Advisor Fees Taken.'
- Should
the client send a fee payment which is deposited into the account, treat it like
any contribution and use 'Type' 'Investor Contribution' when deposited and enter
a 'Type' 'Advisor Fees Taken.'
Profit - Advisor
Fees Taken
- Advisor
fees that were paid from the account.
- Advisor
Fees Paid
- Advisor
fees that were paid directly from the client to the advisor.
- If
client deposits a check for fees into the account use 'Type' 'Investor Contribution'
when deposited and use 'Type' 'Advisor Fees Paid' when paid.
- Market
Value
- The value
of the portfolio on a user selected date.
- Accrued
Dividends
- The
value of dividends that have been earned, but not yet paid.
- Accrued
Interest
- The
value of interest that has been earned, but not yet paid.
- Accrued
Income
- The value
of income that has been earned, but not yet paid.
- Accrued
Fees
- The value
of fees that have been earned, but not yet paid.
- Accrued
Dividends Paid
- The
value of accrued dividends that have been taken to date and that need to be reconciled
in the period paid.
- For
example, you have taken $4,000 in accrued dividends to date.
- In
a subsequent period, the accrued dividends taken (and the accrued dividends earned
in the subsequent period) have been paid; for example $6,000.
- The
subsequent period dividends earned has to be adjusted downward by the $4,000 Accrued
Dividends taken so as not to overstate dividends earned in the paid period.
- Accrued
Interest Paid
- The
value of accrued interest that has been taken to date and that needs to be reconciled
in the period paid.
- Accrued
Income Paid
- The
value of accrued income that has been taken to date and that needs to be reconciled
in the period paid.
- Accrued
Fees Taken
- The
value of fees that have been taken to date and that need to be reconciled in the
period paid.
|
