How can I figure out what kind of returns I'm getting on my investments?

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Most account statements don't provide an estimate of your rate of return, and it isn't an easy thing to figure out without doing a little grunt work. This FAQ section will lay out the basic method and you can use Excel or some financial calculators to get it done.

For the time period you're interested in, you'll need to know

  • The beginning value, and date
  • The ending value, and date
  • Any deposits to the account that you made, with their dates
  • Any withdrawals from the account, with their dates

Dividends and interest don't factor into this calculation, unless you received them rather than leaving them in the account.

Put all of that information into a single Excel sheet, in two columns (amounts and dates). Be sure to observe the correct sign conventions, with deposits being negative and withdrawals being positive. The beginning value ("what you put in") should also be negative and the end value ("what you get out at the end") should be positive.

See the section on the XIRR function on the Excel page to finish this one off.

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