| How to Calculate Annualized Portfolio Return Posted: 29 Jan 2021 04:00 PM PST If you want to find out how much you're earning on your investments, you likely know that you can subtract the starting value from the ending value. If you then divide that number by the starting value and multiply by 100, you have the basic rate of return. But what if you've had your portfolio for several years? Your portfolio is (hopefully) growing every year, compounding your returns. If you want to compare your portfolio's performance with someone else's, the annualized portfolio return gives you the best way to do this. There are 2 different ways to calculate your annualized portfolio return. Your choice depends on whether you want to control for the effect that your contributions and withdrawals have on your portfolio's performance.[1] [Edit]Time-Weighted Rate of Return This calculation shows you a rate of return that ignores investor behavior (deposits and withdrawals), making it the best way to compare the performance of investment managers and brokers. - Find the difference between the beginning and ending values for each year. Subtract the value of the portfolio at the end of the year from the value of the portfolio at the beginning of the year, then divide that number by the value at the beginning of the year. This is your simple, or basic, rate of return. Multiply by 100 to find the percentage.[2]
- For example, if the beginning value of your portfolio was $100,000 and your ending value was $105,000, your simple rate of return for that year would be 5%:
 - If you earned any dividends, include those in your ending value. In the previous example, if you'd also earned $50 in dividends, your ending value would be $105,050.
- Add 1 to each rate and multiply them together. Start by adding 1 to each basic rate of return you've calculated for each year. Then, multiply those figures together to calculate the return for the entire time frame. This incorporates the way the value of your portfolio builds on itself, or compounds over time.[3]
- For example, suppose you've had your portfolio for 4 years and your simple rates of return are 5% (0.05), 7% (0.07), 2% (0.02), and 4% (0.04). Your total return would be 1.19 (rounded):
- Raise the total rate by an exponent of 1/n. In the exponent position, "n" represents the number of years you included in your calculations. You're trying to find the average for any 1 of those years, so the exponent is represented as a fraction of 1 over the number of years.[4]
- Continuing with the previous example, plug 1.1918 into your calculator and multiply by the exponent 1/4. Your answer should be 1.044.
- This calculation gets you a geometric average, which is simply an average of all the simple rates of return that also takes into account the compounding that occurs year after year.[5]
- Subtract 1 and multiply by 100 to get the annualized rate of return. Now that you have your geometric average, you need to turn it into a percentage. Subtract 1 (this takes care of the 1s you previously added to each yearly return) to get your decimal. Then, multiply 100 to get your percentage.[6]
- To continue with the example, your annualized rate would be 4.4%:
 - The full formula is
 , where "R" is the rate of return for each investment period and "n" is the number of years.
- Use a different formula if you only have the initial and final values. To calculate the annualized portfolio return, divide the final value by the initial value, then raise that number by 1/n, where "n" is the number of years you held the investments. Then, subtract 1 and multiply by 100.[7]
- For example, suppose your portfolio's initial value was $100,000 and the final value after 10 years is $150,000. Divide 150,000 by 100,000 to get 1.5. Then multiply 1.5 by the exponent of 1/10 to get 1.04. Subtract 1 to get 0.04, then multiply by 100. Your annualized rate of return is 4%:
 - The full formula is
[Edit]Dollar-Weighted Rate of Return (IRR) This calculation shows the impact your deposits and withdrawals have on your portfolio's performance and is best used to compare your portfolio's returns to another individual investor's returns. - Enter your contributions or withdrawals in column A of a spreadsheet. Open a spreadsheet, then use column A to list each of your contributions or withdrawals to your portfolio, with your first value on row 1 (cell A1). Express withdrawals as negative numbers with a ( - ) in front of them.[8]
- Put each contribution or withdrawal in a new cell. There's no need to combine cash flows for specific periods. For example, if you made 2 contributions and 1 withdrawal in a single year, you'd have 3 entries in 3 cells rather than just 1.
- Put the dates of the contributions or withdrawals in column B. Next to the corresponding value in column A, type the date that contribution or withdrawal was made in column B. Use the "date" function so the program recognizes the values as dates.[9]
- In Excel, the date function is =DATE(Year,Month,Day). For example, if you made a contribution on January 15, 2020, you would enter "=DATE(2020,1,15)".
- Input the formula on a new row. Once you've entered all of your data, drop down a row and add the formula =XIRR(values,dates,[guess]). The 3 variables in the formula break down like this:[10]
- The values you enter refers to the range of cells containing the contributions or withdrawals you made. For example, if you used column A, rows 1 - 20, you would enter "A1:A20".
- For the dates, use the range of cells in the column containing your dates, using the same formula as you used for the values. For example, "B1:B20".
- The third value is your guess as to what you think the IRR will be. If you don't have a guess, you can leave this blank. Excel defaults to 10% if no guess is given.
- Allow the program to compute the solution in the same cell. Once you enter the formula in the cell, the program uses an iterative technique, which involves trying different rates in a complex equation until the correct one is found. These iterations start with your guess rate (or the default 10%) and move up or down to find the annualized dollar-weighted rate of return. The program will display the result in the same cell where you entered the formula.[11]
- The result Excel and other spreadsheet programs reach is accurate within 0.000001%, so it's a result you can rely on.
- Troubleshoot your data if you get an error. If you enter the formula and get an error message instead of a result, it usually means there's something wrong with the data you entered. If you get a "#VALUE" error, it means you have a date that isn't recognized as a valid date. A "#NUM!" error could result from any of the following:[12]
- Your value and date arrays are different lengths
- Your arrays don't contain at least 1 positive and at least 1 negative value
- One of your dates comes before the first date entered in your array
- The calculation failed to converge (find a result) after 100 iterations
- You can calculate an annualized rate of return using any investment period, as long as all the periods are the same. For example, you can use months rather than years. Simply change the exponent to reflect the period you're using. With months, you would use the exponent 12/n (where "n" is the total number of investment periods) to get the annualized return, since there are 12 months in a year.[13]
- Annualized return is used to give you a sense of how your portfolio has done. It's most effective when you're looking at investments over a long period of time.[14]
[Edit]Warnings - Watch your order of operations on the calculations to make sure you get the correct answer. Double-check with a calculator if you're working by hand.
[Edit]Related wikiHows [Edit]References [Edit]Quick Summary |
| How to Save Endangered Plants Posted: 29 Jan 2021 08:00 AM PST As climate change progresses and habitat destruction continues, the list of endangered plant species grows longer. Staring at a list of endangered plants can be discouraging, especially if you aren't sure how you can help. Fortunately, there are a few different ways you can make a difference to help save endangered plants in your community and in your own backyard. - Search for endangered species in your area. Since plants differ between regions, different areas have different endangered species. If you aren't sure which plants are endangered in your region, do a quick search on the U.S. Fish and Wildlife Service website.[1]
- You can visit the USFW by clicking https://www.fws.gov/endangered/.
- In the United States, there are over 5,000 plant species that are listed as threatened or endangered, including the Desert Yellowhead, the Capa Rosa, the White Sedge, and the Green Milkweed.[2]
- In Europe, there are over 900 plant species that are endangered, including the Dwarf Moonroot, the White-Faced Storm Petrel, and the Syrian Juniper.[3]
- In Pan-Africa, there are 39 plant species that are endangered, including the Hoary Clover Fern and the European Frogbit.[4]
- Volunteer for habitat conservation in your area. Habitat conservation groups work to protect the natural land in your area by removing invasive species and keeping the land free for native plants. If you'd like to get your hands dirty, try volunteering your time to help clean up the habitat in your area to make room for endangered plants.[5]
- You can find habitat conservation groups in your area by searching "habitat conservation + your town/city."
- Restore wetlands in your area to preserve natural habitats. Wetlands are areas of land that flood either part of the year or year round. They're one of the largest habitats that grow endangered plants, and they're very important for ecosystem health overall. Try attending a local or state conference in your area about wetland restoration to learn more about what you can do in your area to protect these native habitats.[6]
- If you know there are wetlands near you, you can apply for a Wetland Program Development Grant to start the restoration process.
- Leave endangered plants in the wild if you encounter them. Although endangered plants are cool to come across, removing them from their natural habitat can be detrimental, and may even kill them. Plus, if a plant is on the endangered species list, it's actually illegal to remove it unless you have a permit.[7]
- Feel free to take a photo of the plant for posterity!
- Educate your friends and family about endangered plants. Not everyone knows about endangered plants and how to protect them. If you feel up for it, try spreading your knowledge around to inform your loved ones about what they can do to protect natural habitats and endangered plants.[8]
- You can start the conversation by saying, "Have you guys heard about the native plant species in our area that's endangered? I didn't know much about it, but I've done some research…"
- Not everyone will be open to hearing what you have to say, and that's okay.
[Edit]Yard Work - Plant native plants in your yard or garden. Plants that are native to your region help to encourage other native plants to grow, leading to more habitat diversity (which will encourage endangered plants to grow in your region). If you can, try to fill your natural area with plants that have been there historically.[9]
- Attract pollinators to your yard to help spread pollen to endangered plants. Bees, hummingbirds, butterflies, and moths all help to spread pollen, or the male seeds of a plant. You can plant specific plants in your natural area to attract these animals and help them pollinate your own plants and other plants, including endangered ones, so they can spread their seeds and grow in other areas. Pollinator plants vary from region to region, so search for your area to find the plants best for you.[10]
- Keep natural habitats as they are. Plants thrive in environments that are untouched and undisturbed, especially if they're endangered. If you have the opportunity to buy property, try to leave it as-is as much as possible to encourage native plants.[11]
- If you're looking into buying a home, try to find one that's already been built rather than building a new one on a lot. That way, you can leave an undisturbed habitat alone.
- Avoid planting invasive plants, or plants that have no natural predators. These plants can take over your habitat and make it hard for native and endangered plants to establish themselves. Invasive plants vary from region to region, so you may have to do some research to find out which plants are bad for your area.[12]
- Avoid using herbicides and pesticides in your yard. Herbicides and pesticides can kill endangered plants in your yard and other areas. If you can avoid it, try not to use chemicals to control weeds and pests in your lawn, and instead go for natural solutions, like peppermint essential oil (for controlling bugs) and removing weeds by hand.[13]
- As herbicides and pesticides wash down the waterway, they can kill or harm other plants, too, not just the ones in your yard.
- Be cautious using fertilizer, as well—even if it's organic. If you over-fertilize, the plants won't be able to absorb all of the fertilizer and it will leach into the water supply. That can cause a lack of oxygen and too much nitrogen in the water, which can kill fish and lead to algae bloom.[14]
[Edit]Careful Purchasing Habits - Make sure the plants you buy are legal. If you love collecting rare plants, finding ones that are out of the ordinary can be exciting—but it's important to make sure you aren't buying endangered plants. Go to an established nursery and avoid buying plants online to ensure you aren't accidentally buying endangered plants (which is illegal).[15]
- If you aren't sure whether or not a seller is reputable, ask them about where they got the plant and what species it is. If they have trouble telling you or they don't want to disclose that information, they probably aren't the most trustworthy.
- Buy wood that's certified by the Forest Stewardship Council. Logging is a huge source of environmental destruction when it isn't done properly, and it can destroy natural habitats, leading to plant loss (especially endangered ones). If you're looking to buy wood or lumber, try to find some with the FSC label of approval. This ensures that the lumber has been logged ethically and with the least amount of environmental impact possible.[16]
- To look at a map of FSC certified forests, visit https://fsc.org/en/certified-forests.
- Putting your money toward wood that's collected in an environmentally friendly way will encourage sellers to think about the habitat that they log in, leading to less habitat destruction.
- Find fair trade coffee to protect natural habitats. Growing coffee beans takes a lot of land, and it can lead to habitat destruction, and habitat destruction is the number one cause of endangered plants. When coffee is marked with the Fair Trade symbol, that means it was produced ethically with the least amount of environmental destruction. When you buy coffee, look for the fair trade symbol to protect plants with your purchases.[17]
- Saving endangered plants is tough work, and you may end up feeling a little discouraged. Try to keep your spirits up by looking back on all the work you've already done.
[Edit]Warnings - Buying and selling endangered plants is illegal under the U.S. Endangered Species Act.[18]
[Edit]References |
| How to Learn Guitar Online Posted: 29 Jan 2021 12:00 AM PST If you're trying to learn guitar, the days of digging through chord books and visiting your teacher for weekly lessons are over. Everything you need to become a great guitar player is right in front of you! With the right internet searches, you can learn anything from basic chords and scales to advanced techniques, and even how to do repairs on your guitar. All you have to do is look and practice. If you're ready to start learning, don't delay any longer! [Edit]The Basics - Get a basic guitar and a tuner. If you're going to learn to play, then of course you'll need a guitar! A simple beginner guitar is fine to start out with. Whether you play an acoustic or electric guitar, you'll also need a pick and strap to get started.[1]
- For an electric guitar, you'll also need an amplifier and a cable to hook it up with.
- You should also get an electronic tuner or tuning fork so you can keep everything in the right pitch.
- If you're just starting out, then it's best to avoid spending a lot of money on a guitar. Go to a store and try out some economy models to see what's comfortable and affordable for you.
- Learn the parts and strings of your guitar. Look up the strings, parts, and controls of your guitar to learn what everything does.[2] This way, you can get the most out of your guitar. In standard tuning, the guitar strings are E, A, D, G, B, e, in order from thickest to thinnest. The second e is lowercase because the pitch is higher than the other E.
- Make sure you look up the parts of your specific guitar. For example, the controls on a Les Paul and Telecaster are different.
- Tune your guitar so you're ready to play. You can find all the information you need about tuning your guitar online. Use either an electronic tuner or a tuning fork and adjust all 6 strings to the right pitch by tightening or loosening them. This way, everything you play will sound right.[3]
- While standard tuning is E, A, D, G, B, e, there are also other tunings. However, when you're just starting out, you should keep your guitar in standard tuning to get the basics down.
- There are all kinds of instructional videos online about changing your strings, adjusting the tension, and doing other basic repairs. You can save a lot of money by watching some of these as well.
[Edit]Notes and Chords - Teach yourself to read tablature. Tablature, or tabs, are basically a map of where to put your fingers on the guitar neck. Tabs show all 6 strings on the guitar and numbers on each string. The numbers represent which frets you put your finger on. Tabs are important for learning chords, scales, and songs, so learning how to read them early on will make practicing a lot easier later.[4]
- For example, if a tab sheet shows A – 6, that means you put your finger on the 6th fret of the A string.
- Tabs are also much easier to read than sheet music, so you'll save a lot of time by learning tabs first.
- Professionals often recommend that you learn to play by ear instead of relying on tabs.[5] However, even if you don't rely on them, knowing how to read tabs is very important for learning scales and techniques.
- Start with the basic major and minor chords on guitar. Chords are the foundation of guitar playing, and you can play many famous songs by just learning the main ones. Once you can read tabs, learning chords is simple. Just look up some basic chord shapes and start strumming them.[6]
- The main chords on guitar are A, A minor, B, B minor, C, D, D minor, E, E minor, F, and G. Tons of songs use only a few of these chords. Look up the shapes for these chords to get a good foundation for your playing.
- There are also power chords, which are 3 notes: a root, a fifth, and an octave. Power chords are common in rock, punk, and metal music.
- Practice scales to build your finger strength. A lot of new players find scales and music theory boring, but don't skip it! A scale is a series of notes ordered according to their pitch. Different scales give a whole different flavor to your playing. Even learning a few scales gives you a huge musical vocabulary, and you'll also build a lot of strength and dexterity in your hands by practicing them.[7]
- The most basic scales are the major and minor. Learning the notes in these scales will give you a good foundation.
- Some more exotic scales include the pentatonic, aeolian, Phrygian, and Dorian. Learn these to give your playing a different twist.
[Edit]Resources - Get tabs from a good website. To learn songs and patterns correctly, you'll need accurate tablature. Just doing a simple search for tabs should bring up lots of websites. Click through and find the ones that you like. Once you find a good source, then stick with it for all your tab needs.[8]
- A search term could be "major scale tabs." This will give you plenty of hits to learn from, and you can then just copy what you see.
- Some of the main sites for tabs are 911tabs.com and ultimate-guitar.com. Some teachers and musicians also upload tabs onto their personal websites, so you might find some good sources here too.
- Many tab websites have a rating system where users can rank how accurate the tab is. This is a good way to find quality sites.
- Remember to use tabs as a guide, but don't rely on them completely. If the tab doesn't sound right to you, trust your ear and play the way you think it sounds right.
- Watch YouTube videos for instruction on songs, scales, and techniques. YouTube is one of the best resources for learning to play guitar because you can see and hear what you're supposed to do. There are some excellent guitar teachers who have designed lessons for beginner, intermediate, and expert players, so you'll have plenty to watch and practice with. Do a quick search for beginner guitar lessons and get started.[9]
- Some of the most popular guitar channels on YouTube are Andy Guitar, Music Is Win, and the Art of Guitar. Some professional musicians also have their own channels where they demonstrate how to play their music.
- Some YouTube channels have entire beginner courses for guitar players. Search something like "basic guitar lessons" or "guitar for beginners." You can then follow each video to complete an entire course.
- If you're looking for something particular, search for "how to play the minor scale." You'll find plenty of videos.
- There is also a lot of advanced stuff on YouTube that you aren't ready for yet, so stick with basic courses to avoid getting overwhelmed.
- Sign up for a digital course. Besides free resources, there are also paid lessons available online from professional teachers. These lessons work very similarly to in-person lessons. The teacher will upload videos explaining the lessons, and you'll follow along. Some might even do live lessons with a webcam so you can ask questions and get feedback. If you want more personal guidance, this might be the right choice for you.[10]
- Online lessons can range in price from $20-100 per month.
- Before you actually pay for a course, you should still check YouTube or other websites that teach the same thing. You might be able to get the same instruction for free.
- Avoid courses that make unrealistic promises. These could be scams. For example, if a course promises to make you an expert within a week, this isn't possible. Skip resources like these to avoid losing your money.[11]
- Download apps and games for interactive lessons. There are some apps that make learning guitar into a fun game, which is a great way to stay motivated. Check on the app store for guitar learning apps that you can use to make your practice sessions fun.[12]
- Some apps are pretty basic and just give you chord and scale shapes. Others are full-on games that you can plug your guitar into. These are great tools to get through the more boring parts of practicing.
- Popular apps include Ultimate-Guitar, Songsterr, Fender Play, and Jam Play. Try some of these to find your favorite.
- Use resources that cover the style of music you want to play. While there are guitar-playing basics that everyone should know, there are also important differences between diverse styles of music. You'll be a lot more motivated if you use videos and resources that align with your own musical interests.[13]
- For example, if you want to play in a heavy metal band, you probably don't want a "Smooth Jazz 101" course. There is probably a lot of great information there, but it might not hold your interest.
[Edit]Sticking with It - Practice a little bit every day. Reading and watching a lot of videos is a good thing, but it won't make you a great guitar player by itself. No matter how you slice it, you have to practice to get better. Ideally, try to spend at least 30 minutes practicing each day. Run through some scales, chord shapes, or songs to build your skills.[14]
- Even if you don't have a lot of time, just strumming some chords for 5-10 minutes a day is much better than no practice at all.
- If you have trouble motivating yourself, pros recommend leaving your guitar in a visible spot instead of putting it away. That way, it's easier to pick it up and start strumming.
- Use tab sheets to learn songs. You probably became a guitar player because you wanted to learn songs, so embrace that! There's no better way to stay motivated than trying to learn some of your favorite songs. This makes your practice sessions a lot more fun, and you'll feel accomplished when you nail a new song. Look up the tabs for songs that you like and try to copy those notes on your guitar. With some practice, you'll start to sound like your favorite band in no time.[15]
- While looking up tabs for a song is a big help, you should also listen to it and try to figure it out. Learning by ear is a great skill that will make you a better player.
- Learning songs is a great way to learn new chords and techniques as well. A song you like might use a chord you've never seen before, so you're learning new things while having fun.
- Set goals to keep yourself motivated. When you're learning to play guitar online, you might notice that the lack of structure doesn't keep you motivated. A good way to overcome this is by setting goals. They don't have to be huge goals. Just saying "I want to learn the G major scale by next week" is a great one. No matter how small, these goals will keep you moving forward and improving.[16]
- You can set all kinds of goals. Learning a new song, trying a new technique, or playing in a band are all good ways to stay motivated.
- Remember to keep your goals attainable. If you're a beginner, then trying to play Jimi Hendrix songs might be a little tough right now.
- Use resources made for beginners so you don't get frustrated. While it's good to have ambitious goals, aiming too high can leave you frustrated. If you're just starting out, don't try to use intermediate or expert lessons. You'll probably feel overwhelmed and might quit out of frustration. Avoid this by sticking with beginner lessons to build your skills slowly. That way, you'll be all set to tackle the expert stuff later on.[17]
- Be patient! If you're just starting out, your playing won't be great overnight. You have to stick with it and practice consistently to improve.
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