Friday, January 26, 2007

portfolio evaluation

given that the nse is currently showing signs of periodical readjustment, maybe its time to talk about what we should have done ages ago. and that is portfolio return evaluation. this exercise should be scheduled maybe 3 or 4 times a year. portfolio return evaluation is the only sure way to find out whether indeed you are making or losing money. it invloves finding out the percentages that your investments have gained. whether those gains have been realised or not. normally based on your investment policy you can decide that you are meeting your objectives or not.

the most basic method to find out the return for a period is {(P1 - Po)+ d }/t

where P1 is current price and Po is the price you bought at. d is any distributions given during the period while t is time.

of course this is prety rudimentary but it will serve you well. you can do that simple maths for each of your counters and also for the whole portfolio. that way you wil be able to know how you compare with the likes of old mutual when they report decent percentages like 50% and so on and also help you decide whether u are in the correct investment.

However if your teacher made you hate mathematics so much (always blame the teacher), then you can get a software to do all those calculations. one good software that i use for my personal finance management is called 'Microsoft Money'. apart from being very user friendly, its quite robust and detailed. but microsoft money does not only help u manage your NSE investments. like we have been talking a lot on this blog about trees, cows, fish, candy etc, microsoft money will help u manage all those businesses and investments. you can even track your expenditure on immovable assets such as cars, house, land etc. on top of that it allows you to track your income and expenditure on a daily basis. one cool feature is that it can compare two months and tell you for instance that you spent 4000/= on entertainment this month yet last month you didnt. such features help u decide which expenses are necessary.

another thing is that, it will be able to calculate your investment percentages. all u do is input daily prices. in fact the software can download prices for the US market but for NSE u have to input the daily prices of your stocks. it then calculates and gives you returns for the period as well as very good graphs. whats more if your trade is in foreign currency, just enter it the way it is and the software converts it to your base currency. cool huh? the best news; it retails at only $ 39 on the microsoft site.

well thats enough marketing for one day. otherwise, stanbic UG did what all IPOs do and returned a 200% increase on price on the first day. problem is the shares are many and it may not grow as fast as hoped. stanbic becomes only the 3rd bank to list and 9th firm in the juvenile exchange. as suggested by riba capital we expect the fund managers to try and get their full applications since their money is already in UG currency.

and when i was at it i came across what i consider the best new thing this year courtesy of kikuyumoja . a site which is dedicated to African Ingenuity. very nice ideas.

odegle tip of the day --- monitoring and evaluation of your investments is necessary to avoid massive losses and /or orportunity costs in the future.


  1. Odegle:

    That was a lot of great information. Very helpful, too. Didn't know that about microsoft money, so that's something that will be going on my to do list.

    Thanks a lot!

  2. Odegle: Good post. I have been using a self made excel sheet to track my portfolio with formulas and reasons for purchase and sale.
    I will try and get my hands on Microsoft Money to advance my excel sheet.

  3. Microsoft Money is really good. it will give you whichever report you want at the click of a button. you will also be able to track your net worth over time!

  4. Portfolio tracking is complicated chiefly by the NSE's slow (or more accurately non-adoption) of technology. Check out


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