Investment Logo. Portfolio Rate of Return Calculator

Portfolio RoR Calculator.

Are you an investor who’s looking to figure out the value of an investment account? Well, you’re in luck. With this handy calculator, you’ll be able to compute the average annual rate of return on an investment with a non-periodic payment schedule.

Instructions: In the fields provided, enter the date (month, day, 4-digit year) and amount of a particular investment. From there, enter dates and dollar amounts of new investments and withdrawals, followed by the resulting balance of the account. Once you’ve filled in as much information as you can, click on CALCULATE. You’ll see your total profit/loss for the account as a dollar amount and your average rate of return as a percentage. Good luck with your investments!

Note: The calculator will make a maximum of 100,000 attempts at finding the solution for the cash flow schedule. If the calculator reaches that limit it will pop up an alert message warning you of the potential inaccuracy of the rate result.

Month Day Year Investments Any Withdrawals & End Value
in Final Entry Row
<< Value at Beginning
Result Amount
Average annual rate of return:

4 Low-Risk Strategies to Improve Your Portfolio Returns

Diminishing Returns.

Investing always carries with it a certain amount of risk. But not all investments need to be high-risk, and if you don't want to take big chances with your money, you have a number of investment options that will still offer you solid returns. Like all investments, low-risk investments require patience and a certain amount of attention and flexibility. Consider these options for your low-risk portfolio to give you peace of mind while still earning returns.

Purchase Bonds

Most people are familiar with what stocks are, but a misconception exists around the definition of a bond. While bonds certainly are investments, they don't work the same way as the stock market or an investment in precious metals. A bond is actually structured like a loan. You give money to a bank or a company, and they give it back with interest after a certain time period.

Some financial planners consider bonds to be good investments, while others think the low risk and low return make them less worthwhile, especially because of inflation. Like any investment, bonds come with levels of risks. The company who sells the bonds might go out of business. You might need your money back before the bond matures. The bond issuer may not be able to pay you back at the end of the term. As a general rule, however, most investors consider bonds to be safer investments than the stock market, because as long as the bond issuer is sound, you get your money back plus interest.

Before investing, beware of junk bonds. These bonds have extremely high interest rates because of the high level of risk associated with them. Junk bonds are issued by borrowers who don't have good credit, which means getting loans with low-interest rates is very difficult. Because of this, the risk is very high because the borrower might not be able to pay the bond back later. While junk bonds are useful investments for a certain type of investor, if you're looking for low risk you should steer clear of these.

The trick to buying bonds is finding a good interest rate while also getting security. The longer the term of your investment, the higher your interest rate. If you buy a bond while interest rates are high, it doesn't matter if they fall afterward. You're locked into that good interest rate and will receive that amount of interest when the bond's term is up.

The drawback is the time frame. Unlike more liquid investments, you have to pay a penalty if you need your money before the term of the bond arrives. Or, you have to sell that bond to someone else, and you might not make your money back in that case.

You need to have a relatively sizable chunk of money to invest in bond funds, which are groups of bonds, especially if you want a diverse portfolio. However, given the number of relatively secure bonds available (those provided by federal or municipal governments tend to be the lowest risk) it's easy to develop a diverse portfolio with bond investments. Some of them include savings bonds, treasury bills, treasury notes, and municipal bonds, though that list certainly isn't exhaustive.

Be aware of management fees on bond funds as well as if they are open ended or close ended. If you plan on holding bonds until their duration, you may be better off creating a laddered bond portfolio rather than investing in an open ended bond fund. The issue with an open ended bond fund is if interest rates rise & other holders of the fund sell, not only do they realize losses but that also drives losses for remaining owners of the fund.

Go for Passive Portfolio Management

Passive management is one strategy of investing in which investors allocate their money into index funds, which require less management and trading. The theory is that rather than an active management strategy, which involves a lot of buying and selling in order to try to predict market trends and "beat" the market in some way, passive management funds take less effort and less risk but still provide a good return on investment.

The difference between the two is especially valuable for those who have a broker or a financial planner managing investments. Given that you have to pay financial professionals to manage your portfolio, having an active management strategy is going to cost more, and if the risk of an active management strategy doesn't pan out, you'll be paying for a service that in the end didn't make you more money.

As with any investment strategy, there are risks involved with both. With a passive management portfolio, your investments are very diversified and are intended to reflect the overall market index, rather than looking around for quickly growing or undervalued stocks and other investments. When you invest in an index fund, you're actually investing in a lot of spread out funds, with tiny chunks of many investment options all rolled up into one. The risk is significantly lower because of how much your money is spread out. Transparency and an increased level of safety for the money invested are what tend to draw people toward index funds.

One of the keys to having high compounded returns is to have a low management cost. The Vanguard Group offers low cost mutual funds & ETFs which allow you to invest across a broad section of the US stock market (VTI), the global stock market (VT), or even the global stock market ex-US (VXUS). They also provide ETFs focused on bonds, and various vertical niche markets within the broader stock market like high dividend or technology stocks.

A number of robo-advisors like Betterment and WealthFront offer low-cost portfolio management. Some also automatically offer tax loss harvesting to further boost investment gains, however most of these robo-advisor services are fairly new and have not yet been tested by going through a major recession and stock market crash.

Invest in Value Stocks

Investing in stock always carries with it a certain amount of risk. But the amount of risk in different stocks is not equal, and it is possible to invest in the stock market with less risk depending on where you put your investments. This is where value and growth stocks come into play.

Growth stocks are stocks that investors expect to do better than average because the company is predicting a high level of growth in the future. Though there are many reasons a company is likely to perform well, like investing in expansion, management structure, and an upward trending market, none of these guarantee that a growth stock is actually going to grow. Because of this, you're going to take on a higher level of risk when investing in growth stocks. You must also have patience, because the timeline for making a significant profit might be longer than originally anticipated.

Value stocks, on the other hand, are slower investments with lower risk. The basis for a value investment is finding a company whose stock is undervalued for one of multiple reasons. It could be because of a bad quarter, a lower value of the stock that does not reflect the value of the company, or a company that pays more in dividends.

This kind of stock isn't likely to grow at a fast rate, but has the potential to create a long-term investment opportunity. Because value stock also often pays more in dividends, you have the opportunity to make more current income, which you can use or reinvest as you see fit.

Rebalance Your Portfolio

When you first create your portfolio, you and your financial planner come up with a strategy that's right for your investments. This strategy includes how you allocate your assets. Coming up with this strategy is a combination of assessing risks and aiming for high returns. You might decide on a 70/30 split of stocks to bonds, a 50/50 split, or another configuration.

As the market changes, however, the ratio of your assets will change as well. If stocks do better than bonds over the next year, that 70/30 original allocation might become 80/20. Some people might want to hang on to well-performing stocks and let the new balance of the portfolio stay in effect. Just because a stock did well in one quarter doesn't mean it will continue to do well going forward. Making this kind of portfolio decision is difficult to do without emotion, and rebalancing to a previously decided upon allocation is the best way to keep emotions out of it.

If you do not rebalance, the amount of risk in your portfolio increases or decreases based on how things changed. For example, if you do decide to keep the stock that was performing well, and now have 80% of your portfolio in stock instead of the original 70 percent, that's more risk than you intended when you set up the portfolio. The purpose of rebalancing is to return your portfolio to its original configuration of asset allocation.

If you do decide that you can now financially handle more risk, rebalancing is a good time to do that. But it deserves more thought than simply keeping stocks that did well in the past. It still might be time to sell portions of those stocks and invest in up-and-coming markets or companies. This is a decision you and your financial planner can make based on the current state of the market. Rebalancing is also the best way to make sure you're keeping up with how your assets are performing and staying on top of your investments.

Smart Investing

Ultimately, a number of considerations go into low-risk investing. While where you put your assets is very important, the way you manage your portfolio is equally important. You don't need to buy and sell constantly, but you should keep an eye on how your assets are allocated and decide on a management style that will affect how much you make in returns. This way, you can continue to assess the amount of risk in your portfolio and the amount of risk you can handle as an investor.

Putting All Your Eggs in One Basket.

No investment is perfect, but you have the control to create the portfolio that's best for you and your financial circumstances.



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