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running the numbers, check my xirr

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  • running the numbers, check my xirr

    I ran an xirr on my overall investments from 2012 to now and I am getting 23 % as the result. It seems too high to be true for me.

    without giving exact number, the total amount of my investment (basis) is around 26500 and the value of those investments are 29500.

    I did recently invest a large portion of it recently when the market was down and now that the market is up, it seems to have gained a lot. However the numbers still seem too high for me and I wanted to make sure I was doing the xirr formula correctly.

    I will give an example of how I did it for my betterment porfolio

    12/31/2015, 1000

    1/11/2016    1000

    1/13/2016    1000

    1/19/2016     1000

    1/20/2016     1500

    this was 5500 of my 2015 roth contributions

    now for 2016 roth i did

    5500 on 2/16/2016

    total amount invested (basis) 11000

    total value of investment 11730

    when I run the xirr for the above data i get 0.95, which is 95 % right? Betterment app tells me my return is about 6.5 %

    makes no sense to me where I am getting it wrong

     

    thanks for your help

  • #2
    Seems that a pretty darn good rough estimation would be the (current value - basis)/basis - which returns about 6.6% for you numbers above.  I looked up XIRR in Excel and noted the range has to contain at least 1 negative value and 1 positive value.  It seems like investments into the account would be neg#s and dividends or proceeds from a sale would be positive numbers.  So maybe you are just entering the data incorrectly for the XIRR function.

    cd :O)
    Yet those who wait for the LORD Will gain new strength; They will mount up with wings like eagles, They will run and not get tired, They will walk and not become weary. -- Isaiah 40:31

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