I’m curious, how does your brokerage calculate rate of return YTD? Does it include your YTD contributions or do they exclude your YTD contributions in the YTD return %?
I’m using Schwab, and they include the amount that I added to my investment accounts in 2021 as part of the gains or rate of return on investment for YTD. I find this extremely misleading. Is this a common practice? Anybody else using Schwab - am I just misunderstanding the analytics?
Am I thinking about this correctly that the current year’s contributions shouldn’t be counted in the Rate Of Return on Investments?? This is boggling my mind! Can anybody help with the Yearly Rate of Return formula?
| Year | Amount Contributed | Begin Year Balance on Investment | Ending Year Balance on Investment | Yearly Rate of Return | Yearly Rate of Return Formula |
|---|---|---|---|---|---|
| 2020 | $10,000.00 | $15,000.00 | $30,000.00 | 33.333% | (Ending Year Balance - Amount Contributed) / Begin Year Balance |
| 2021 | $20,000.00 | $30,000.00 | $40,000.00 | -33.333% | (Ending Year Balance - Amount Contributed) / Begin Year Balance |