Do you track your returns, and if so, why?

[llmgwc]

Does it serve a purpose on an individual level to track your returns? If you are investing like a boglehead, why would tracking your individual returns be necessary?

[jebmke]

Only returns to Amazon.

Historical returns for portfolio aren't meaningful to me so I don't keep track. It isn't something that would change my behavior going forward.

[livesoft]

Definitely, yes. I want to make sure that I am getting the market return or better. I want to make sure that I am not making behavioral mistakes as evidenced by making less than the market returns.

[pizzy]

Definitely, yes. I want to make sure that I am getting the market return or better. I want to make sure that I am not making behavioral mistakes as evidenced by making less than the market returns.

I'm surprised to hear this. What non-market funds are you using? Or is this just worrying about tracking error?

[jebmke]

Definitely, yes. I want to make sure that I am getting the market return or better. I want to make sure that I am not making behavioral mistakes as evidenced by making less than the market returns.

I'm surprised to hear this. What non-market funds are you using? Or is this just worrying about tracking error?

He times, in a way.

[dogagility]

I track my retirement portfolio balance yearly relative to my prior projections. I enjoy it (when the balance is increasing!), and it helps me see how far off reality is from my expectations of reality.

[Johm221122]

I don't actually track my returns but I see each individual funds performance in my statements
I do track my portfolio and reevaluate my plan every year. I reevaluate my plan because it's a specific goal I'm shooting for.(a specific amount adjusted for inflation and able to support a safe withdrawal strategy for my desired retirement income)

[Normchad]

I actually don’t.

[jebmke]

I track my retirement portfolio balance yearly relative to my prior projections. I enjoy it (when the balance is increasing!), and it helps me see how far off reality is from my expectations of reality.

I keep track of my balance (but not projections since I make none). The balance, of course, can be influenced by many things unrelated to returns. It is also an essential ingredient in understanding if there are sufficient funds to get you from today into the ground.

[livesoft]

Definitely, yes. I want to make sure that I am getting the market return or better. I want to make sure that I am not making behavioral mistakes as evidenced by making less than the market returns.

I'm surprised to hear this. What non-market funds are you using? Or is this just worrying about tracking error?

I have some TIAA funds: Real Estate Account and Traditional Annuity. I have a small-cap and value tilted portfolio.

[dbr]

Returns? No. For one thing with money coming and going as irregularly as it does over time the computation would be onerous and the results not meaningful.

We do track portfolio value, asset allocation at a high level, spending, and withdrawals.

[muffins14]

I do not. For me, it’s not actionable, in my opinion.

If returns are bad, what am I going to do?

If returns are great, I could be more conservative? But I’m 37. No bonds yet

[DetroitRick]

Yes. By doing so, and especially by benchmarking properly, I can verify that I am doing the best I can. And that I am not making behavioral mistakes. My portfolios are moderately complex compared to 3-fund stuff, including some individual stock and bond positions.

My tracking process is fairly automated and takes little time anyway. The benefit includes what I stated above, plus it allows me to ignore a portion of market "news" and virtually all the noise about allocation and asset selection beyond the basic principles. That alone makes it worth it to me - less wasted time.

It has resulted in changes over the years - fewer funds, lower cost funds, better tax efficiency, the use of individual bonds in some cases, and even improved cash management. For me, it has functioned as a great learning tool (but obviously not my only tool).

Tracking returns does not negate the importance of non-quantitative factors in my decision making. They matter too. It's what I DO with the tracking results that really matters.

[rob]

Nope... only current value against preferred allocation.

I only use index funds or funds that quack like them (TIPS fund etc), so I'm not tracking if the manager did their job compared to the index. I only have so many brain pixels and this is just noise to me.

[sherwink]

On Jan 1, I have a spreadsheet of holding standing. I print it out. I compare the results to the previous ten years of performance of my portfolio against the S&P.

[Taylor Larimore]

llmgwc:

I do not track my portfolio except to read my annual Vanguard statement. Perhaps I should look for mistakes but I can't remember it ever happening. All my three funds are at Vanguard.

Best wishes.
Taylor

Jack Bogle's Words of Wisdom: "Simplicity is the master key to financial success."

[steadyosmosis]

I track/monitor enough to know: 1) if/when to re-balance, and 2) whether I am staying within my SWR.

[fishnhunt]

Yes. I have a spreadsheet I update on Jan 1 each year for all retirement accounts. DW and I each have these accounts: Rollover IRA's, Roth IRA's, 457 b's, Pensions.

I update the Jan 1 balance (start), Dec 31 balance (end), contributions and return for each account. Gives us a good overall picture. I track the returns to make sure I am close to what the market is. I have a column to track a few different index funds as well (FXAIX, FSKAX, etc). If my returns are not close to these, I investigate (except for the pension accounts, those are verified separately). If something is way off, it's a good indicator something is wrong with my account.

[calmaniac]

No I don't track our returns. I do track our accounts totals ≈3x/year.

Question: If one is adding to one's investments every year, how do you account for that in your return tracking? Do you simply take the account value on January 1 and December 31, subtract out any new investments or withdrawals, and then calculate the % change?

[AnotherRetiredGuy]

Before I retired at the end of last year, no. I was too busy. And since I was following advice I had read in "A Random Walk Down Wall Street, I saw no point. I knew I was already doing what the experts said.

If I had been tracking our returns, and with that what it implied for our retirement income level, I might have been able to tell my wife that we were richer than I realized. We bought whatever was important (putting children through college without loans) and didn't buy what wouldn't have made us happier (detatched house), and were lucky enough to be able to do it.

Now that I have more time on my hands, it is hard to resist some tracking, and I will rebalance more frequently. Just being on this board is a form of mental tracking.

Obviously if you aren't lucky enough to have enough money to be, by your personal standards, consistently comfortable, it is important to see if you are going in a sustainable financial direction, despite the risk of taking an undisciplined path. Knowing that, say, our 401(k) was down 20 percent this year would not have had value.

[rich126]

I've never really tracked expenses. Returns I usually log at the end of the calendar year. Mostly because of a job I had required end of year financial information (yeah, it was a bit annoying).

Now retired, I will track some things more closely since our budget isn't unlimited.

[Onlineid3089]

No. I mean, I guess I'll look at what is in the performance section of Vanguard's website occasionally but that is as far as I'll go.

Behavioral mistakes aren't an issue for us. Contributions are almost entirely automated. We only invest in VTSAX (taxable) and target date funds (all tax advantaged accounts). The only sell order I've even had for funds at this point was to move the HSA to cash to transfer to Fidelity where it went right back into a target date fund.

[FrugalInvestor]

I only track returns to the extent that Vanguard provides that information since the bulk of my investments are there. But typically I just glance at the total value of my investments and my asset mix, which is very easy to do since I'm a 2-funder with a minimal allocation to cash (operating) reserves.

[fishnhunt]

Question: If one is adding to one's investments every year, how do you account for that in your return tracking? Do you simply take the account value on January 1 and December 31, subtract out any new investments or withdrawals, and then calculate the % change?

Fidelity and my 457b account will give you a YTD return, I'm not sure how contributions are factored in. I don't contribute to my rollover IRA, so that's easy enough.

[ruralavalon]

Does it serve a purpose on an individual level to track your returns? If you are investing like a boglehead, why would tracking your individual returns be necessary?

I check rate of investment returns of my portfolio monthly, just out of curiosity.

I am retired, and it's not actually necessary for me. I do NOT keep track, I don't use a spreadsheet, because this is not actionable information for me.

[Gnirk]

I check maybe once every few years ut of curiosity. I'm comfortable with my asset allocation, I'm retired and not contributing new money.

[ebeb]

Vanguard gives you a 10year annualized portfolio return factoring in contributions/withdrawals amounts to get an IRR. Schwab only goes back to 2016. I wish these would give longer periods of returns for how your investments are doing

[Wiggums]

I review our accounts once a month to read any online messages or look for unexpected activity. We are buy and hold investors so our main focus is on estate planning and taxation.

[tetractys]

Does it serve a purpose on an individual level to track your returns? If you are investing like a boglehead, why would tracking your individual returns be necessary?

I’ve been tracking my returns for 23 years, almost since the beginning, and I reconstructed my returns before that. The purpose is historical matter-of-fact knowledge that has simplified and solidified decision making, instilled unshakable financial confidence, and even recorded important biographical markers.

In the beginning it took some time and effort; but over time it has become quite simple to keep up.

Every once in a while on this forum a poster reveals their fear of discovering the extent of their investing mistakes. I can say with confidence that over the long term, even some pretty nasty mistakes amount to very little.

[secondopinion]

Does it serve a purpose on an individual level to track your returns? If you are investing like a boglehead, why would tracking your individual returns be necessary?

It is truly pointless to track returns; only the present portfolio matters. If one needs to reduce certain risks at the expense of taking other risks, then they should do that. If it is rational to do this, then why should it matter how it turns out besides for bragging rights?

I do not invest like a boglehead really, but I see no reason to track my returns either because I do my best to rationally invest according to my risk needs.

[doobiedoo]

What software do people use to track their returns?

[HeelaMonster]

Back in the day, before I started using Personal Capital to aggregate, I was in the habit of totalling all investments at the end of each year. At that point, while EOY statements were in hand, I often calculated return over the prior year for various accounts. But it was just for fun/interest, didn't lead to any actions on my part, and I haven't bothered to do that in quite some time. Same with tracking Net Worth.

[TomatoTomahto]

What software do people use to track their returns?

I don’t make it a point to track our returns, but Quicken by default loads two charts on my front page:

- value of $10,000 for my portfolio vs S&P 500.

- NW vs a year ago.

I don’t obsess over these numbers, but they’re interesting. As long as our NW is positive vs a year ago, which it has nearly always been, that’s a win.

[Hacksawdave]

I quit doing that in 2005. I just keep summarized spreadsheets and old PDF annual reports for reference. It also makes a good educational tool to show my nephew why it is important to start saving early.

[doobiedoo]

What software do people use to track their returns?

I don’t make it a point to track our returns, but Quicken by default loads two charts on my front page:
- value of $10,000 for my portfolio vs S&P 500.
- NW vs a year ago.
I don’t obsess over these numbers, but they’re interesting. As long as our NW is positive vs a year ago, which it has nearly always been, that’s a win.

I don't mean tracking net worth. I am interested in tracking actual returns.
This means adjusting for portfolio additions, withdrawals, etc. It's complicated.

[KyleAAA]

Yes, for fun.

[Doctor Rhythm]

Nope. I enjoy seeing my balances rise and avert my eyes when they fall, but don’t track anything.

[jebmke]

Nope. I enjoy seeing my balances rise and avert my eyes when they fall, but don’t track anything.

Heh, I look more when they fall; more actionable info Rebalancing and TLH.

[Doctor Rhythm]

Nope. I enjoy seeing my balances rise and avert my eyes when they fall, but don’t track anything.

Heh, I look more when they fall; more actionable info Rebalancing and TLH.

I try not to stare at the total balance, but if things are bearish, I do scan for losses in my tax lots every few weeks to look for TLH opportunities. Sadly, I had many such opportunities last year.

[DetroitRick]

The tools I use to track returns:

Quicken (pc based) and Schwab Portfolio Performance Tools (online, Schwab accounts)
Both are fully automatic, always up to date, and require no input to measure returns (in total, security-level, and asset class level)
Schwab is more useful in terms of one-step imbedded comparison to benchmarks, but is currently not available to some of us in it's complete form (coming soon) so I have temporarily discontinued use this year.

Excel
I download data and improve the format a bit yearly. Just in case the other tools go away.

So really this is no different from reviewing any past performance of anything. If your analysis is instructive, it is a self-teaching tool. I'm not predicting future returns with this, just sometimes identifying future tactics and improvement strategies. Obviously if measuring makes you do stupid things, or worry, I'd either stop measuring or adjust my thinking. We're all different - but it has helped me immeasurably. But the bar here is low for me - time is negligible, especially in light of the importance of my portfolio in largely funding my life.

[TomatoTomahto]

What software do people use to track their returns?

I don’t make it a point to track our returns, but Quicken by default loads two charts on my front page:
- value of $10,000 for my portfolio vs S&P 500.
- NW vs a year ago.
I don’t obsess over these numbers, but they’re interesting. As long as our NW is positive vs a year ago, which it has nearly always been, that’s a win.

I don't mean tracking net worth. I am interested in tracking actual returns.
This means adjusting for portfolio additions, withdrawals, etc. It's complicated.

Yes. That’s incorporated in the “value of $10,000” chart. If I were interested, Quicken also tracks many other metrics.

[Kenkat]

I track my portfolio return, the relevant benchmark return, my yearly contributions and my ending balance yearly. I have been doing this since 1999.

I did it to see how my portfolio balance is tracking towards my goals so I know if I needed to save more. I also do it to see how my modest slant to small, value, EM, REIT and commodities is performing against an equivalent benchmark with the same US/Intl/Bond allocation.

Since I retired last year when the numbers looked good - I did a pretty good job of getting to where I needed to - I now use it to track portfolio balance against spend down vs against a savings goal.

I just use a spreadsheet and update it once a year.

[rob]

No I don't track our returns. I do track our accounts totals ≈3x/year.

Question: If one is adding to one's investments every year, how do you account for that in your return tracking? Do you simply take the account value on January 1 and December 31, subtract out any new investments or withdrawals, and then calculate the % change?

As above I don't either but there is an internal rate of return calc that you can do to account for positive and negative cash flows to account for all this... I assume excel or alike have these functions but you can do manually each month and link the figures together in whatever range you want.... but it's some work.

[LadyGeek]

This thread is now in the Investing - Theory, News & General forum (general discussion).

[AerialWombat]

I track my balances and net worth, but not my personal, blended rate of return.

For my real estate portfolio, I do use planning software that calculates various types of return for me, so I can see that if I really wanted to look. For Treasuries and HYSA, I can see the yield. For VTI, I can look it up, and occasionally do.

So I have a general idea of how each piece is performing, but it’s basically immaterial. It has no bearing on what I do with the money, my timeline for disposing of rentals, or anything else. It’s noise.

[calmaniac]

Question: If one is adding to one's investments every year, how do you account for that in your return tracking? Do you simply take the account value on January 1 and December 31, subtract out any new investments or withdrawals, and then calculate the % change?

Fidelity and my 457b account will give you a YTD return, I'm not sure how contributions are factored in. I don't contribute to my rollover IRA, so that's easy enough.

Where does Fidelity have this? I just checked my Fidelity "Year End Investment Report" and don't see it. Searching "returns" or similar on the Fidelity site does not yield it. I found my Schwab accounts do have returns calculated over any period within the past 5 years. Thanks!

[nanosour]

Been retired 10 years and track returns using the XIRR function in excel. 60/40 3-Fund portfolio is returning 6.37% nominal and 3.68% real after 2.69% annual inflation. I'm happy with anything over 3% real as I based my early retirement on the Cautious scenario (3% real) found in ESPlanner; now MaxiFi. IMHO the plan is executing as designed.

As to why I track returns? I guess it's just easy and I'm a numbers guy. Don't ask me to explain that.

[ChinchillaWhiplash]

Yes. Helps with rebalancing with new funds, dividends, and to sell off a fund to buy the fund that is down. Have tilts and more than 3 funds.

[KidneyMD]

Yes. There's even a "Returns for Bogleheads" spreadsheet.

[muffins14]

Given the responses, I should update my answer.

I don’t track my % returns at all, but I DO track my portfolio.

Sadly I look daily at the fidelity app to see “how things are going”, and i do tax-loss harvesting when possible, and I rebalance according to a spreadsheet that compares my current vs target allocations across my asset allocations. I don’t rebalancing daily, obviously, but I see my portfolio daily.

so I manage my portfolio, but I don’t measure the return % on the portfolio. The closest I get is that I have a column where I project a future portfolio value for each year, assuming contributions plus 4% real growth. Then I compare that to my actual portfolio value at the end of the year.