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Nancy Brodsky
Philly
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| 12/08/2007 1:32 PM |
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As a long-time treasurer, I wonder why UNIT VALUE for the club isn't discussed more as a measure of performance. That's what mutual funds use in essence. It is unaffected by partner withdrawals unlike the metric value & cost basis that is graphed in CA.
What am I missing?
Nancy Brodsky - Women Take Stock - Philly PA |
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IRA SMILOVITZ
Leonia, NJ
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| 12/08/2007 2:13 PM |
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In a message dated 12/8/2007 1:31:27 P.M. Eastern Standard Time,
toolshed@stockcentral.com writes:
As a long-time treasurer, I wonder why UNIT VALUE for the club isn't
discussed more as a measure of performance. That's what mutual funds use
in essence. It is unaffected by partner withdrawals unlike the metric
value & cost basis that is graphed in CA.
What am I missing?
Unit value isn't used as a measure of performance by investment clubs for
the same reason it ISN'T used by mutual funds. Namely, it doesn't measure
performance. Whenever a mutual fund makes a distribution, its unit value
decreases. That doesn't reflect a decrease in performance. Unit value is just a
mechanism for allocating ownership rights equitably.
Ira Smilovitz
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Gene Rooks
Gotha, FL (W. of Orlando)
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| 12/08/2007 2:42 PM |
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Nancy, there are some folks on here who can help
with the mathematical technicalities at work here, but I do know there are two
elements of performance, one is performance of one current member's
contributions since they joined the club, which can be quite different from
another member being in the club for a different amount of time. Unit
value wouldn't apply there at all.
The other is performance of the present portfolio
of stocks. This doesn't take into consideration what the performance
of sold stocks was. Both of these CAR percentages are available on either
the Member Status Report, or the Valuation Statement. Also on the
Member Status Report (provided you check the option to include the CAR) is what
I believe is the full club's full history performance, past and
present, underneath individual current member's performance. Somehow
I don't believe current unit value encompasses all of that.
Let's hope someone who really knows what they are
talking about can clarify for both of us.
Gene
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Gene Rooks, Director
Space Coast Chapter
Accounting Instructor |
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