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Annual Performance Summary: Balanced Portfolio

Over the past few decades the investment industry has developed a methodology for measuring investment performance that borders on a complete science - requiring the use of complex mathematical formulas and computer programs. The investment industry's standardized measurement platform helps to ensure all investment performance is calculated and reported in a standardized format. This standardized format helps to ensure investors are making an apples to apples and oranges to oranges comparison when viewing published rates of return.

When measuring the performance of a sample portfolio we do not use this standardized format. Why not? Well, we simply do not have access to the computer program required and we are really only interested in answering two simple questions:

  • Did we make any money?
  • How much did we make?

To answer these questions, we do not need a complex computer program. All we really need are the summary reports for each sample portfolio and a bit of math. We use a very simple approach to the calculation of each portfolio's performance, answering the following questions:

  • What was the portfolio's beginning value?
  • How much money did we add to the portfolio from our savings?
  • How much money did we withdraw from the portfolio?
  • How much did the portfolio receive in dividend and interest income?
  • How much did we make or lose from our invested capital (capital gains or capital losses)?
  • What was the portfolio's ending value? - and finally the bottom-line:
  • How much money did we make last year?

InvestingForMe's Sample Portfolio sections provide a complete summary of the portfolio's annual performance and the contribution from each source to the overall performance. The period of measurement for each sample portfolio is from July 1st to June 30th each year. 

Note: The method we use to calculate our portfolio's investment performance is very simple, does not include transaction costs and  does not make any adjustments for items that may occur during the period of measurement. Namely;

  • the timing of additional deposits and withdrawals to and from the portfolio
  • the timing of interest and dividend income payments
  • the timing of changes to individual investments and
  • income taxes payable

As a result of these missing adjustments, it may not be accurate nor appropriate to compare our calculated performance with the published past performance for other types of investments.

Remember: The sample investment portfolios are intended as a learning aid. They are not to be interpreted as investment advice or recommendations. For detailed information about the Sample Portfolios, their transaction histories, income payment schedules and the calculation of each portfolio's investment performance, visit the Sample Portfolios sections of the website.

Past performance is not indicative of future performance

Indicated rates of return are the historical annual compounded total returns based upon the investment strategy stated in each Sample Investment Portfolio's Investment Policy Statement (IPS) and the individual transactions as chronologically listed in each Sample Investment Portfolio's Transaction Summary. The returns are based on the historical annual compounded total returns for each Sample Investment Portfolio including changes in market values and re-investment of all interest and dividend payments received. The stated performance for each sample investment portfolio is the Average Annual Rate of Return since each portfolio's inception - June 21, 2010.

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