AIM return measurements.
I have been using a different method for calculating my portfolio returns.
I've based my idea on the way companies report their profits.
On my spreadsheet I have a purchases column and a sales column, I total each of these columns then subtract the sales from the purchases, this gives me the equity.
I have a running equity as well as an equity for a period such as our financial year.
So, at the end of the financial year I work out the totals up to that date, this tells me the equity (or Working capital) at that point. I then work out the profits from the sales and dividends and divide it by the equity, this gives me the ROE.
I also track the Net Tangeable Assets (NTA) to see how much above the equity they are, they are quite high at the moment as the market is at near highs, but as these profits are unrealised gains they are of curiosity value only.
So far my ROE for the years on my full AIM account have been:
2004.....6.7%
2005....13.4%
2006.....9.7%
2007....23.9%
2008....14.7% (to date)
My LD AIM Account has done.
2004.....2.7%
2005.....7.4%
2006....18.4%
2007...104.8%
2008....11.0%
The 104% 2007 return is high because there was quite a bit of selling in the earlier part of the year and this reduced the equity and in turn produced profits.
Regards
Neil
AI
