|
|
Post by InvestingInP2PLending on Mar 24, 2019 19:42:02 GMT
Most platforms show lifetime XIRR as the return rate and to show how well the jnvestor's portfolio is performing. This metric is from my perspective useless as I want ro know how well is it doing in the last 1, 3 or 6 months. In addition the reports seem to be showing numbers that are better than reallity? Does anyone have the same experience? Am I seeing something wrong here? Can anyone gice some feedback on this? I wrote a post on this as well for anyone who is interested. There are a few Excel templates that I have been using. investinginpeertopeerlending.com/dont-trust-the-returns/ |
|
|
|
Post by df on Mar 24, 2019 20:20:34 GMT
Most platforms show lifetime XIRR as the return rate and to show how well the jnvestor's portfolio is performing. This metric is from my perspective useless as I want ro know how well is it doing in the last 1, 3 or 6 months. In addition the reports seem to be showing numbers that are better than reallity? Does anyone have the same experience? Am I seeing something wrong here? Can anyone gice some feedback on this? I wrote a post on this as well for anyone who is interested. There are a few Excel templates that I have been using. investinginpeertopeerlending.com/dont-trust-the-returns/Most platforms I'm in don't show lifetime XIRR. FC, LC and Rebs do and I find it useful. As far as I understand the discrepancy comes from not including cash drag, but providing I'm drip feeding the figures shown are not far from real.
|
|
|
|
Post by southseacompany on Mar 25, 2019 0:32:08 GMT
The topic title is a bit misleading, since you are actually questioning the utility of lifetime XIRR rather than XIRR in general. I agree it would be nice if the platforms showed returns over time periods as you suggest, but I suppose there isn't enough demand for this sort of analytics to make it worth their while to implement it. It can also be argued that the currently common practice of omitting the effect of cash drag (presumably the cause of the discrepancy you mention) is fair in a sense, since cash drag may be caused by the actions of the investor more than of the platform (e.g. too "greedy" autoinvest settings cause cash drag).
|
|
benaj
Member of DD Central
Posts: 4,862 
Likes: 1,591
|
Post by benaj on Mar 25, 2019 7:37:10 GMT
I think it is too easy to misunderstood any analytics, and compare platforms with different lending models. I've misinterpreted many times. Bonds for example only pay interest a fixed number of times in a year, without accounting the accrued interest, bonds may look like non performing between payment dates.
|
|
|
|
Post by InvestingInP2PLending on Mar 25, 2019 14:46:56 GMT
The topic title is a bit misleading, since you are actually questioning the utility of lifetime XIRR rather than XIRR in general. I agree it would be nice if the platforms showed returns over time periods as you suggest, but I suppose there isn't enough demand for this sort of analytics to make it worth their while to implement it. It can also be argued that the currently common practice of omitting the effect of cash drag (presumably the cause of the discrepancy you mention) is fair in a sense, since cash drag may be caused by the actions of the investor more than of the platform (e.g. too "greedy" autoinvest settings cause cash drag). Sorry if the tittle is misleading. I still don't really get the utility of it other than knowing how good was the investment in that platform in general. It seems to me that the metric shown on the platform is useful for the first few months and that is it. With P2P investments I am interested how much returns is my portfolio generating in the past x months. I am also interested if it significantly changes for one reason or another so that I can see what is going on and take some action. I also get that it is not a high priority in for the developers of the platforms as there us most likely nit enough demand for it. I am just wondering what people are using that metric for.
|
|
|
|
Post by InvestingInP2PLending on Mar 25, 2019 14:50:32 GMT
I think it is too easy to misunderstood any analytics, and compare platforms with different lending models. I've misinterpreted many times. Bonds for example only pay interest a fixed number of times in a year, without accounting the accrued interest, bonds may look like non performing between payment dates. But what do you use the lifetime XIRR for? If you have an example that would be super nice.
|
|
