Calculating Your Rate of Return with the Modified Dietz Method

In her debut video, Shannon explains how to calculate the Modified Dietz Method and the "Linked" Modified Dietz Method (and compares them to the money-weighted and time-weighted rates of return calculations from our previous videos).

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[adbp]

I guess Justin saw the topic heading and gracefully handed it over to Shannon. Well done Shannon, I think Justin owes you a big drink. :-)

[chrissydieb]

Amazing - Thank you for the brilliant explanation! ☺️

[nehachilwal]

Thank you so much for this video. I really understand the concept of Twrr Mwrr and modified Dietz from your video very easily explained with details.

[oscarmendezvalladares]

Great video! Thanks for the explanation. I have one doubt though that is making me a bit crazy. I am trying some examples of the Modified Dietz Method with my portfolios, and I've noticed that performance grows steadily every month even though I'm not really making gains. This is because one year ago I withdraw almost my whole account and left very little money in it, but the gains of that period continue make effect on the portfolio. The thing is, since the time period continiously grows, the effect of the weighted outflow that I did continiously have more effect (making the denominator smaller every month), resulting in having every month more returns even though my current portfolio value is not even changing. I am not sure if I'm explaining myself correctly, but I find this to be a big problem so I'd really appreciate it if you can help me understand why this happens and if something can be done about it.

[apothe]

Why does PWL Capital do so much for the ordinary investor?

[charisc]

Thank you so much. i just came across your channel. It's great information. re cashflow, if the portfolio (other than holding in ETF) has two cash accounts and i move $ from cash account no 1 to cash account no 2 within the portfolio to settle the purchase of ETF, do you consider this as cashflow in the return calculation? Thanks

[cajstretton]

Has the YTD return been calculated correctly? Taking Gobe, 12.47%. If you take geometric mean of his returns, gives 0.98%. You can get 12.47% but its not been raised to power 1/n...

[seideldaniel]

Thank you for this excellent explanations! I have a question: If I calculate the twrr, the mwrr or the modified dietz for all of my individual assets in my portfolio (because I want see the performance of each of them) can I then add the weighted returns of each asset to get the overall portfolio return ?