Measuring Performance

Frequency of Evaluation

1

The frequency of evaluating performance is important. The standard case in the finance industry is that investors evaluate performance once a year. With that said, it depends on your investment strategy.

2

If you are a trader, it may be more appropriate to evaluate your performance on a weekly, monthly, or quarterly basis. While, for a long term investor, once a year may be sufficient.

3

Equally, if something significant happens, such as a financial crisis, it may be necessary for an investor to review their portfolio outside of their usual cycle, to decide what is the best steps to take forward.

4

Getting the right balance is important when it comes to reviewing performance. If you review your portfolio too much, it can cause you to make bad decisions that affect your long term investment returns.

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1. How much can you expect to earn from a cash investment?

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