In episode 9 on the Wilson Wealth Management YouTube channel, we look at how to compare different investment returns. With so many return calculations available, what are the differences between measures? Which investment returns provide the best information for investor analysis?
How do gross returns compare with net returns? Realized versus unrealized? Base versus local currency?
Why is it important to differentiate?
What is the difference between arithmetic mean and median returns? When should each be utilized in analysis? What are the advantages and disadvantages of each measure?
Can geometric (time weighted) or dollar weighted (internal rate) mean calculations address the limitations of arithmetic mean? Thereby helping investors make better decisions.
If you would like to read a little more on these topics, including the calculations and examples, please check out: “Investment Returns Are Not All Equal”, “Mean Investment Returns”, “More Mean Investment Returns”.
