Considerations
The dollar weighted return, also know as Internal Rate of Return (IRR) or money weighted return, considers the timing and size of your buys, dividends/interest and sale proceeds, providing you with an accurate personal rate of return. The IRR calculation assumes each invested dollar grows at the same continuously compounded rate. The results explain the performance of an investment based on the timing and size of subsequent contributions and withdrawals to the original position. Since the IRR is based on your personal trading activity, the results are not comparable to published indexes. The IRR, expressed as an annualized rate of return, cannot be calculated directly, but must be interpolated. You can also view your returns in terms of Time-weighted Rate of Return. Click here to view more information on Time-weighted Rate of Return.