Do you include your play money investments in your internal return tracking?

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Nearly A Moose
Posts: 874
Joined: Fri Apr 22, 2016 5:28 pm

Do you include your play money investments in your internal return tracking?

Post by Nearly A Moose » Wed Nov 29, 2017 11:35 pm

For those Bogleheads who have "play money" accounts (e.g., 5% of total investments set aside for trading or bitcoin or whatever) and who track their overall internal rate of return across their entire portfolio, do you include the "play money" allocation in that figure? My intuition is that it won't move the needle much either way.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: Do you include your play money investments in your internal return tracking?

Post by dbr » Thu Nov 30, 2017 9:58 am

Well 100% return on 5% of the investment adds 5% to the weighted return. Loss of all of the 5% reduces the overall return by 5%. Out of an expected return of between 5% and 10% that result would be huge. Play money doesn't have much point if there is not a pretty good chance of the return ranging as much as +/-100%.

sco
Posts: 771
Joined: Thu Sep 24, 2015 2:28 pm

Re: Do you include your play money investments in your internal return tracking?

Post by sco » Thu Nov 30, 2017 11:55 pm

What play money?

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