QUANTITATIVE SELF ASSESSMENT TOOL

QUANTITATIVE SELF-ASSESSMENT TOOL 

Assess your performance monthly, quarterly, half-yearly & annually 

Background: 

We need to compare our profit/loss in relation to that of experts of our market. Our mutual funds(basket of different types of shares and bonds) are managed by professional fund managers. They are well trained with education and experience on equity market. They try to maximise profit, and minimise risk. Their overall achievement reflects the profitability of our market. So, you can compare your performance with them and get an idea about your situation.

PROCEDURE:

Take total four mutual funds (2 govt: one recent and one 3 years older, and 2 private- one recent and one older). Take a time frame. For example, NAV of the fund at 1st July and NAV of that fund at 31 st december. Then, calculate ...profit of each fund over last six months. Next, make an average of profit of 4 funds. This is the standard profit possible in our market. If you are achieving it, you did very well..........because your performance is similar to professional managers. 

EXPLANATION:

Reason for choosing different types of funds Govt funds: they are conservative and more aware of risk. Private funds: they are aggressive and take risk for profit. Older: mature and got more IPOs (10% reserved for MF). New: less IPO, Initially takes time to settle. So if we take representative 4 MFs, we will get an standard profit calculation.

LIMITATIONS:

Mutual funds spend 10% of their capital in IPO, their chance is higher to get an IPO. But they have a lot of management expenes, that you dont have. Moreover, their 10% money almost always remain stucked with IPO. So balances each other. 

EXAMPLE:

July 01, 2010: NAV of AIMS, DBH-1, 3rd NRB & ICB AMCL-1 were 5.84; 12.2; 10.55 & 619.98 respectively.

October 01, 2010, NAV of those 6.59,12.65, 12.13, 705.29.

October 31, 2010 NAV of those were 7; 13.78; 12.86 and 786.26.

4 months profit(July 01 to October 31)

were 19.8%; 13.16%; 21.8% and 26.8%.

Average profit= 20.4% over last 4 months.

Last one month (october) profit

were 6.2%, 8.9%, 6% and 11.4%;

average of last month= 8.125%

INTERPRETE YOURSELF:

Last month (october):

Profit below 8%= needs improvement.

8-10%= good.

10-12%=very good.

Above 12%= excellent. Last 4 months (July 1st to October 31st):

below 20%=needs improvement.

20-22%= good.

22-25%= very good.

above 25%= excellent.

(be cautious: before calculating last month's profit, you need to know market value of your share on 1st october and 31st october. suppose, by selling a share you made 30% share on 18th Oct, you cant add complete 30% profit on october, because you might have bought that 3 months ago. October's profit/loss is difference between 1st and 31st october market price).

YOU DONT NEED TO WORRY ABOUT CALCULATION, I WILL POST ABOUT MARKET AVERAGE PROFIT EVERY 2 WEEKS.

So, let us know your last 1 month and 4 months profit.

Posted in: Analysis