Calculating mutual fund profits with pre-authorized contributions?
June 23, 2006 9:03 PM   Subscribe

Is there an easy way to figure how much profit one has made from a mutual fund portfolio where additional fixed contributions are made each month?

I started an RRSP mutual fund account with my bank last year, and designated a certain amount of money to be taken out of my chequing account each month and used to buy more units of the funds. Although I can easily find out how much my current holdings are worth, is there some way to figure out how much profit the mutual funds have earned at any given point? It seems like it would take forever to do manually!
posted by greatgefilte to Work & Money (7 answers total) 1 user marked this as a favorite
Have you checked to see whether your bank offers some online tool for checking this? I've never made an investment through a bank, but when I invest through brokerages, they always have a tool that'll let me view my profits.

If you have all the records of your previous investments, it's fairly trivial to set up a tracking account via Yahoo! Finance. Simply enter the data for each investment, and Yahoo! computes your return for you. I use it to track my IRA.
posted by jdroth at 10:30 PM on June 23, 2006

(Current value) - (Initial Investment + (Monthly Contribution) x (Number of months you've contributed) )
posted by Wolfdog at 2:15 AM on June 24, 2006

re: jdroth's excellent suggestion:

I get 20 spams a DAY from various places promoting penny stock sales, and I personally correlate it with when I started using Yahoo finance to calculate my portfolio values. Can't blame them for sure, but I sure am suspicious!
posted by FauxScot at 5:43 AM on June 24, 2006

The math is pretty simple if all you want to do is figure out how much your investments have increased in value. Just add up how much money you've put in (X months multiplied by Y dollars), and subtract that from the current value of the investment. If you end up with a negative value, your investment has lost money. If the value is positive, it has earned money. This calculation will only give you and overall gain/loss figure, though.

If you enter the transactions into finance software like Quicken or Microsoft Money, the software will tell you exactly what your returns have been for a given time period.

On a side note, congratulations on having started putting money away for retirement. It's an excellent step toward financial independence.
posted by gwenzel at 9:08 AM on June 24, 2006

Oh, one more thing - try not to worry too much about short-term gains and losses. An RRSP is a long-term investment, and short-term paper losses aren't usually worth worrying about, especially if you're investing a fixed amount on a regular basis.
posted by gwenzel at 9:14 AM on June 24, 2006

A more difficult question is how to calculate percentage performance; I asked a related question here and got some decent answers.
posted by Big Fat Tycoon at 11:58 AM on June 24, 2006

The XIRR function in Excel will calculate the performance of the investment pattern you describe. It's an "AnalysisPak" function; you'll need to have your MS Office disk in order to get it running the first time. (You can use the IRR function if you make the same contribution on the same day of the month.)
posted by MattD at 3:37 PM on June 24, 2006

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