TIME WEIGHTED RETURNS VS MONEY WEIGHTED RETURNS
I think probably 70% of the people here don’t really calculate their returns.
Certainly not the traders with multiple transactions, cos it is a mammoth task doing so.
The vast majority of the remaining 30% are probably calculating it wrongly (Wrongly, that is, if you are using your ROI and comparing it to active managers)
Basic management 101 tells us that whatever doesn’t get measured, doesn’t get done/improved upon.
Cos if you don’t have an accurate barometer of what you’re doing, you wouldn’t be able to tell what works and what doesnt. In fact, knowing human nature, you’re more likely to over emphasis your wins, and try to shut off the nagging voice reminding you of your losers. And those
