Asset growth is a prime requirement for a healthy, profitable investment portfolio. Calculate and track asset growth rates to monitor investments you already own and/or do the same for investments you are considering to help determine whether or not to get in. A computer, a spreadsheet program such as Microsoft Excel, a bit of background knowledge and a few simple formulas are all you need to successfully keep track of asset growth.
Asset growth is not a complex concept; it simply means the degree to which an asset increases or decreases in value over time. Although you can keep track of asset growth manually with paper, a pencil and a calculator, using a computer spreadsheet is not only more efficient and accurate, it is also relatively simple. Identify investments you want to track “pre-purchase” and/or gather the most current statements for investments you already own. Open a new workbook in a spreadsheet program and save the workbook with an appropriate title.
Start keeping tracking of asset growth on investments you already own. Leave column A on your worksheet blank for now and starting in column B enter the column headings “Purchase Date” and “Purchase Price.” Decide on a time period to use for tracking. As an example, you may decide to track investments monthly for a period of one year. Skip column D to create a space that makes viewing results easier and then in column E enter the month/day you will revisit the investment to track asset growth. Then, in column F enter “Growth Rate” and in column G enter “Percent Change.” Repeat this for each date in your tracking time period. Finally, return to column A and enter the names of your investments in the rows running down the spreadsheet page. List each investment individually and for the sake of clarity, consider grouping asset types, such as stocks, bonds and annuities, together.
Update Current Value
On the first date you chose for updating asset growth, look up the current value for each of your assets and enter the amount in the column E date field. Use a current statement if you have one, look up the asset on the Internet or speak with your financial planner to get a current value. As an example, if asset A is a stock you purchased at $20 per share and you determine it is currently trading at $25 per share, enter $25 in cell F2.
Calculate “Return on Investment.” ROI is simple calculation you enter as a formula in column F and then press “Enter” to let Excel do the work for you. The formula is (current value minus cost) divided by (cost multiplied by 100). Enter the first formula in Excel as “=(E2-C2)/C2*100)” and press Enter. As an example, if you purchased 10 shares of stock for $20 a share and the current trading price is $25 per share the current ROI of this investment is 25 percent. Do this for each investment you own, making sure to enter cell references that correspond to the row in which you are working. Review each ROI result to see if it is in line with your investment goals and make the decision whether to continue keeping track of the assets growth or if now is the time to sell.
- QFinance: Definition of Return on Investment
- Microsoft 2010: Data Analysis and Business Modeling; Wayne L. Winston
Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.