Captools/net Documentation

Investment Performance (ROI)

Investment Performance (ROI)

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Investment Performance (ROI)

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One of the primary benefits of Captools/net investment software is that it enables the user to monitor investment performance.  This is important because, over a long period of time, only a small difference in performance can mean a large difference in wealth.  As an example, an investment earning 14% over 25 years will have almost double the ending value of one earning 11%.  We believe that investors who adequately monitor their investment performance will consistently out-perform those who do not.

 

Monitoring of investment performance is not as simple as watching returns reported to you by your mutual fund company.  The reason for this is that such period-to-period returns do not take into account your investment timing decisions. Stocks, bonds and other investment holdings complicate the issue since dividends often may not be easily reinvested.  Also, once one has multiple holdings, the combined performance of all investments is not readily apparent even if you know the approximate performance of the individual holdings.  Commissions, fees and taxes further complicate performance monitoring, since it is only the net return on investment that determines ultimate wealth.

 

Captools/net resolves all of these performance monitoring issues by computing and reporting "Return on Investment" (ROI), the true measure of investment performance.  This can be done before and after taxes, before and after fees and commissions, by security, by user-definable security groups, by portfolio, or by groups of portfolios, annualized or non-annualized, time-weighted or non time-weighted.

 

Captools/net ROI results are available on any Security Performance or Portfolio Performance type report.  These can be customized to include performance figures along with performance benchmark results as well as measures of risk such as standard deviation, beta and portfolio "draw-down".  ("Draw-down" is the maximum percentage decrease in a portfolio's value, over a specified period, due to market fluctuations.)  Additional information on performance reporting is provided in the topic Performance Reports.