Simple Dietz method
The Simple Dietz Method is a way of finding out how well an investment did over a certain amount of time. Let's pretend that you have $100 to put into a piggy bank or a bank account at the beginning of the year. At the end of the year, you check to see how much money you have. If you still have $100, then you didn't make any profit. But if you have $110, then you made a profit of $10.
Now, let's say you added another $50 to your piggy bank halfway through the year. Now you have a total of $150. At the end of the year, you check to see how much money you have. If you still have $150, then you didn't make any profit. But if you have $165, then you made a profit of $15.
The Simple Dietz Method looks at how much money you initially put in, how much money you added, and how much money you have at the end of the year. It goes a step further by taking into account the time that the money was invested. It looks at the average amount of money you had invested over the whole year.
So, if you put $100 in at the beginning of the year and added $50 halfway through the year, and you had an average of $125 invested over the year, and your ending balance was $165, then your calculated return is 32%.
The Simple Dietz Method is a simple way of finding out how much money you make on an investment over time, even if you add or take away money at different points during the investment period.
Now, let's say you added another $50 to your piggy bank halfway through the year. Now you have a total of $150. At the end of the year, you check to see how much money you have. If you still have $150, then you didn't make any profit. But if you have $165, then you made a profit of $15.
The Simple Dietz Method looks at how much money you initially put in, how much money you added, and how much money you have at the end of the year. It goes a step further by taking into account the time that the money was invested. It looks at the average amount of money you had invested over the whole year.
So, if you put $100 in at the beginning of the year and added $50 halfway through the year, and you had an average of $125 invested over the year, and your ending balance was $165, then your calculated return is 32%.
The Simple Dietz Method is a simple way of finding out how much money you make on an investment over time, even if you add or take away money at different points during the investment period.