Test Portfolio Performance Statements – Oyster River Financial, LLC

The summary and detail Test Portfolio (TP) return performance statements provide:

Monthly data from the TP brokerage statements regarding opening and closing account values, withdrawals, and deposits,
The monthly investment gains and losses implied by these figures, and
Calculation of monthly returns, based on the assumption that all deposits are made at the beginning of the month and all withdrawals are made at month end.

In other words, monthly returns are calculated simply by dividing {monthly investment gains and losses} by {beginning of the month account equity plus deposits} . This methodology understates TP returns during months with a positive return, while overstating returns in negative months. Because the preponderance of the TP’s monthly returns have been positive, the net result is a significant understatement of overall TP returns. (In the case of October 2022 – when Bill sold his house – a 10/28 deposit of over $200,000 lowered that month’s gross returns from approximately 10% to 6.9%.)

Note that “monthly investment gains and losses”, as used in this calculation, is a comprehensive figure that includes all changes in account equity other than those arising from transfers, deposits, and withdrawals. This definition of monthly investment gains and losses differs from the one used in brokerage statements that provide separate detail for items such as commissions, dividend income, and margin interest expense.

In addition to presenting gross returns, the Detail Statement also shows how these returns would be affected by a hypothetical quarterly asset management fee of 0.375%.

Important performance-related disclosures are presented in the Performance section of this site and in the Data Driven Investing book. Understanding of all such disclosures is a critically important prerequisite to understanding the conclusions that may be drawn from the TP’s performance history. Past performance does not guarantee future performance. The TP’s returns have NOT been audited by an independent third party.

Test Portfolio Returns (July 2000 – December 2022)

Note: Past performance does not guarantee future performance. Note also that ORF does not provide personalized investment advice.