Portfolio Returns with Asset Sales and Changing Holdings

Summary

The document poses a portfolio performance question involving three assets held at the start, the later sale of one asset, and updated values for the two remaining holdings. It asks how to calculate the portfolio return over the full period, but provides no answer or calculation method. In particular, it does not state how to treat the sale proceeds or whether they remain in the portfolio, are reinvested, or are withdrawn.

The question points to the need to account for changing holdings when measuring portfolio performance. The starting asset values, sale price, and later asset values alone do not establish a complete return calculation unless the treatment and timing of cash flows are also specified. The document gives no evidence, comparison of return conventions, or resolution of these assumptions, so it serves as an open problem rather than a worked explanation of time-weighted or asset-weighted returns.

Key ideas

• The question concerns portfolio performance when holdings change during the measurement period.
• A sale affects the portfolio’s assets and may create cash that must be accounted for.
• The document does not specify whether sale proceeds are reinvested, retained, or withdrawn.
• It provides no calculation method or answer for the proposed return measurement.

Tags

# Time and asset weighted rate of return of a portfolio


# Time and asset weighted rate of return of a portfolio












If I have a portfolio with 3 initial assets on day 1 (say, stock 1 with beginning market value of \$100, stock 2 \$150 and stock 3 \$175) and after 10 days the stock 2 is sold for \$200, how can I calculate the return of the portfolio after 30 days, assuming that stock 1 is now costing \$150 and stock 3 \$200?

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.