KEEPING TRACK OF YOUR INVESTMENT PERFORMANCE
Measuring your portfolio's performance is necessary to honestly evaluate
whether its excess returns (over the passive index approach) adequately pay
for your time and effort. Of course you may enjoy the 'game' for its own
sake. Regardless, you need to know how much your fun may be costing you. Research shows that investor's perception of their own performance has zero correlation to their actual results.
The following three steps (weekly, monthly, yearly) should keep you in charge of your portfolio,
without allowing it to take over your life.
Investors should make a conscious decision how frequently to monitor their investments. There are two human failings that must
be acknowledged. First, the more frequently a portfolio is monitored,
the more investors are driven by market noise rather than long-term
fundamentals. Second, investors assign a higher mental weight to a $100
loss than to a $100 gain - we are risk adverse. These failings feed off
each other to your detriment. More frequent monitoring allows you to 'see' temporary losses. Those losses will triggers sales even though your other holdings may have profits. Less frequent monitoring is better than
more frequent. Lack of attention prevents flip-flop decisions, and bandwagon jumping, and frequent trading.
- Weekly : You want to access the news, charts and price-percent-changes of your holdings in one place. You do NOT want your personal purchase price showing here. Selling decisions should be based on a forward-looking
opportunity basis, not based on whether you have broken even or earned
30%, etc. That is just the kind of dysfunctional behavior that technical traders rely
on. The vast majority of new investors stubbornly ignore this advice. They want that cost$$ and are convinced that Behavioral Finance does not apply them.
One easy way to keep up on the news for your stocks is to create a
It is a good idea to choose Thursday for your weekly check-up. A lot of people wait for the end of the week and then react at Monday morning's opening bell. If actions are needed they is better done the same week.
- It is quick to add and delete names
- All the news, on all your stocks, is on one page. Choose the View called "All News'.
- You can check in weekly to get the % change over that
period. Using either the 'Percent Performance' view or 'Build-your-Own' view, click the '5-Day-Chg' column heading to sort the holdings. This is the only website that has this option. It is invaluable for weekly tracking. If your benchmark ETF is included then you see immediately which did better or worse.
- The 'Ratios' view can be used to Copy-Paste current stock prices into the monthly spreadsheet talked about below.
- Include the US$/Loonie index (FXUSC-I) and you have the currency exchange rate for translating US stocks.
Click to enlarge.
- Monthly: The spreadsheet for Portfolio
Transactions gives you more information and history than any of the
pre-packaged software. The month-end results are frozen and saved, and the
YearToDate profit totaled. Your tax return can be checked against it. The spreadsheet reports in your home currency, so there is no delusion
about FX risks. Each January you start with a fresh slate and forget the past. You benchmark on a calendar year basis. You need this detailed history in order to improve your investing. You can see;
- the portion of your profits coming from income vs capital gains.
- the turnover speed of your portfolio.
- whether you got rid of losing positions fast, or hung on for large losses.
- whether your losses were from FX or the actual stocks.
- whether your gains were from a broad mix of stocks, or from big winners (but few lucky picks).
- whether 'sells' were months after your profits peaked or timely.
- whether you did a better job picking debt securities than common stock or foreign stock.
- whether the $$profits from that risky stock you sweated over, were really meaningful to your overall profits.
- etc. Example below.
Click to enlarge.
- Multi-Year: At year-end add your results to the Multi Year Returns
spreadsheet. It gives you positive (hopefully) feedback for renewed
savings and investing. It allows you to compare your long-term returns
to the index's compounded returns, and plan for the future. The following is an example.
Notice that each year's return is weighted equally. The multi-year rate of return generated is comparable to other people's. When asked what your long-term rate of return is, this un-weighted calculation is your answer. This is how every index is calculated. This is what every mutual fund does. That is what you would do with any benchmark you use.
If you want to factor into your calculations the timing of your savings/draws don't do it by rejigging your rates-of-return. It is more informative to weight the benchmark returns with those same cash flows (as done in the right column above). Compare your portfolio's ending value to the benchmark's ending value.
While you are documenting your yearly investing results and wealth accumulation, take a minute to record for posterity your personal Pensionable Earnings (from T4 tax slip) and the Maximum Pensionable Earnings for that year (from government sites). It is the ratio of these amounts that gets averaged to determine your eventual CPP benefits. Currently the government can give you a record of your personal PEs, but it is next to impossible to find the historical Maximums. So you cannot make an informed decision to start CPP early, or delay for a higher benefit. Record the facts while they are available.
Some brokers and financial software measure multi-year returns using the Internal Rate of Return (IRR or XIRR) calculation (WeighHouse Calculator). This weights the returns for different periods by the amount of capital you have invested in those periods. When used on a multi-year period it is not a meaningful measure for any kind of comparative purposes.
To see this compare the IRR results of two people invested in the same assets, that earn the exact same return each year. IRR would make it seem that Mr B's returns were much higher, only because of the timing of the savings/withdrawals. When you are young, with a small portfolio, the size of your savings added will be large in comparison. The additions will have a huge impact on a calculated IRR.
|Mr A |
|Mr B |
20 year old
|starts with ||$800,000||$10,000 |
|same return in year 1 ||20% loss ||20% loss |
|at end of year 1 ||draws $10,000 ||adds $10,000 |
|same return in year 2 ||30% profit ||30% profit |
|ending value ||$805,980 ||$21,525 |
|IRR ||1% ||5% |
Compare those returns to the return when each year is equally weighted. Both earned 2%.
$100 * (1 + 20%loss) * (1 + 30%gain) = $104 . Use the Present Value of a Dollar function on your calculator with variables PV=$100, FV=$104, n=2. Solve for i% = 2%
PORTFOLIO YEARLY RETURNS
To calculate a portfolio's return visualize your portfolio as a list of securities that includes a line for cash. Imagine a circle around the portfolio. You measure the value within the circle at the beginning of the year, and its value at the year end. You adjust for additions and withdrawals that cross the boundary of the circle.
Dividends and interest income do not cross the boundary. When received, the cash gets added to the line for cash. It never jumps outside the circle. It stays within what you are measuring. Purchases and sales of securities do not involve cash moving in or out of the circle. Debt should also be inside that mental circle around the portfolio, so the measurement of the portfolio's return will include the effects of leverage.
If borrowed from your broker, the negative cash balance will be included in the broker's statements, and interest payments will move cash around inside the circle, but not jump over the boundary. If you borrow to invest using a bank's Line Of Credit or a HELOC the interest payments may increase the debt if not paid, but if paid from some other account they should be treated like cash flow crossing the boundary.
You have to adjust for cash added or withdrawn from the portfolio. The timing of these cash flows affects how much principal was at work earning the profits.
The best way to measure your rate of return is the same way mutual funds do - by 'unitizing' your portfolio and its cash flows. For this you need the value of the portfolio just before the cash flow. The ratio of the cash added/subtracted as a percentage of the account's value at that time, determines the number of units added/subtracted. The Portfolio Transactions spreadsheet includes a box for this calculation.
In the example following there are an arbitrary 100 units outstanding at the start, and one withdrawal and one addition during the year. Each time, the value of the account was recorded and the unit count adjusted for the additions/withdrawals.
|No. of |
|start ||$100,000||100||$1,000 || |
|withdraw ||$105,000 ||100||($10,000)||(9.5) =100 * 10,000/105,000|
|add ||$98,000 ||90.5 ||$25,000 ||23.1 =90.5 * 25,000/98,000|
|end ||$119,000 ||113.6 ||$1,048 |
|Return = ||(1,048 / 1,000) -1 = 4.8%|
There are less exact ways to calculate the return more simply. First calculate the $$ profit =
* (the ending value, plus withdrawals)
* less (beginning value, plus savings added).
To calculate a %return you divide the $$ profit by the amount invested to earn the profit. If there were no cash additions or draws, then the amount invested equals (the portfolio's value at the beginning of the year). The effect of cash added or removed during the year depends on the relative size of the portfolio. Adding $5,000 to a $15,000 portfolio has a huge impact on its calculated % return . But removing $5,000 from a $500,000 portfolio has little impact.
People with large portfolios are wasting their time trying for exactitude. For them, it is sufficient to assume either -
- The cash flows just before the end of the year. Divide by (the Jan portfolio's value) because that is all that was at work for most all the year.
- The cash flows right after the start of the year. Divide by (the Jan value +/- the cash added/removed).
- The cash flows happen in the middle of the year, or in multiple flows through the year. Assume half the amount was available through the whole year. Divide by (the Jan value +/- half the cash added/removed).
Those people with small portfolios relative to the cash flowing in and out may want more exactitude in measuring their rate of return. The calculation used by mutual funds (above) is better, but some brokerages report the IRR (Internal Rate of Return) metric on their statements (WeighHouse Calculator). Cash flows are weighted by their date. The problem with this metric is that buried in the math is the assumption that while any cash added/withdrawn during the period was NOT in the account it was earning the same rate of return as the IRR result. Most often in the real world that assumption will be false.
To judge for yourself, consider that you own only one stock through a full year. That stock's value stays steady at $100 for almost the whole year. On Dec 31 it jumps to $120. The stock's return was 20%. What was your return? If you had invested $1,200 on Jan 1, your portfolio would be worth $1,440 at year end for a 20% return - just like the stock itself.
What would your return be if you added $100 savings at the start of each month? By Dec 30 you would have $1,200 invested still valued at $1,200 because the stock price was flat. But on the last day the price rises 20% making your portfolio worth $1,440. Your rate of return calculated with IRR would be 38.78%.
Should you pat yourself on the back for almost doubling the return of your benchmark? Were you really smart making some decision? What decision? Is that 38.78% comparable to anything quoted in the markets? What investment went up 38.78%? If you had invested $1,037.61 on Jan 1, and it went up 38.78%, you would have ended up with $1,440 - your actual ending portfolio. But you had only $100 invested at the start, with additional savings trickling in over the year.
IRR is a misleading metric because it presumes that savings added during the year were earning the same calculated IRR percentage return while NOT yet invested. That presumption does not reflect the reality of young people who add savings periodically from their paycheques - before which the money did not exist much less earn a profit. That presumption does not reflect the reality of retirees who withdraw savings periodically to pay for living expenses - after which the money does not exist much less earn a profit.
Most new investors don't want to track returns on a calendar year basis. They want to ignore everything except what they currently own. They want to calculate gains/losses on individual securities from the original purchase. This accomplishes nothing good and encourages bad behavior. Regardless, here is how to make the calculation if you really, really insist.
First, recognize that the returns from an individual security will never be perfectly accurate when dividends are received. To be accurate you would have to include the profits from where-ever the dividend was reinvested. But most people would attribute those gains to the second security bought with the dividend dollars. So it is better to assume the dividend does NOT get reinvested.
If there is only one purchase, the calculation of the holding-period return is simple.
- Calculate the increase in market value. E.g. if bought for (or start period at) $100 and it is now valued at $150 = $50.
- Add the dollar amount of dividends received. E.g. You bought at a 4% yield and received 2 distributions of $1 each = 50 + 2 = $52.
- Divide by the purchase price (or starting value) to give the cumulative gain over the holding period. E.g. 52/100 = 52%.
If all the dividends received were used to purchase more shares of the same security (as in a DRIP), then you can be more accurate and include the compounded profits from that reinvested income.
- Record the total market value of all the shares owned at the beginning of the period. E.g. 500 shares at $2.00 each = $1,000
- Do the same with all the shares at the end of the period. This will include the shares bought with reinvested dividends. E.g. 520 shares at $2.35 each = $1,222
- Your profit is the difference between the beginning and end. E.g. 1,222 - 1,000 = 222
- Ignore the $$ received as dividends during the measurement period because their value is now reflected in (2) above.
- Divide by the original value. E.g. 222/1,000 = 22% profit from both income and capital gains.
Multiple purchases (or sales) make things a lot more complicated. There is no 'correct' way to handle this. There are different methods that best reflect reality in different situations. The numerator's calculation of $$profit is now -
* the sum of (the ending value, plus interim sales, plus dividends received)
* less the sum of (the beginning value plus interim purchases).
The denominator depends on the timing of the subsequent purchases and sales - how much money was at work earning that profit. You can make the same adjustments here as were suggested in the section above calculating Portfolio Returns. Assume the purchases/sales happened soon after the initial purchase, or just before the final sale, or half happened at the start.
None of the calculations can be considered 'factual'. Each has implicit assumptions built in. Use your judgement.
Please, please don't try to calculate annualized returns for individual assets. There is no point to the exercise. Your desire to do so strongly indicates that you are paying too close attention - which will lead to bad behaviors. Yes, technically you could use IRR to calculate an annualized rate of return, but as shown above, the IRR metric is meaningless and misleading.
We always compare our returns to some metric - usually a large index. It is human nature. It is important feedback you need for deciding whether you should be stock-picking or passive indexing. So how do you pick the correct index?
Use the 'total return' variant of any index. Dividends and interest must be considered reinvested to earn an additional return, just like the cash in your account is used for new purchases. It should make no difference if your holdings pay a higher/lower yield than the benchmark index. It would only be appropriate to use the price-return index if your portfolio's yield equals the index's yield, and you are withdrawing all dividends when received (e.g. in retirement), and nothing more.
You may consider choosing the equal-weighted variant of your index - if it exists. There are arguments pro and con. If your own portfolio is a rough basket of equally weighted stocks, with sector weights more equal than the economy, an equal-weight index may seem more comparable. But your portfolio may be a blend of index ETFs, with high-conviction stock picks making up only 50%. Then a cap-weighted index is more comparable. Also you are probably more likely to include large-cap stocks in your stock picks just because they are so big.
Choose a blend of two indexes when your asset allocation includes some debt. For a (say) 60/40 equity/debt portfolio use the S&P Index (times 0.6) plus the 7-year government bond index (times 0.4). You are trying to benchmark against a 'normal' return for the level of risk you can tolerate. How to define 'normal' is subjective. The large-cap stock index of a well-diversified economy is a pretty good proxy for 'normal' and the 7-year bonds are closest to 'normal' for most interest rate environments.
Think twice before further prorating your benchmark with more indexes.
E.g. if you invest outside the country to goose your returns and accept FX risk as a result - it is self-serving to include the foreign index in your benchmark.
E.g. if you start worrying about inflation and change your debt to RealReturnBonds - keep benchmarking to the original 7-year government bond index to find out if your decision pays off.
E.g. if you buy small-cap or value stocks expecting them to have higher returns - do NOT include those indexes in your benchmark.
In all these examples you are essentially stock-picking - trying to goose your returns. The point of benchmarking is to see if those decisions pay off.
On the other hand, IF you have set IN STONE a portfolio allocation to (say) emerging markets and value stocks, then it is OK to include these indexes in your benchmark. But don't kid yourself. The reality is that people calling themselves passive indexers are changing their allocations with the fashions. Their intentions at the start are not kept. The point is NOT to create a benchmark that reflects your current holdings. That is self-serving. Your benchmark weightings must be static over the long term - a full business cycle. Use your predetermined asset allocation, not the actual allocation.
Passive indexers often dismiss the proof that individuals can outperform the market, by arguing that the 'wrong' index was used for the benchmark. E.g when Warren Buffett outperforms the S&P Index, they claim "He did not outperform the Value Index and that is what he owns". This argument is wrong because it uses hindsight to determine the benchmark. Buffett is free to own stock, options, debt, futures contracts, etc. He was never constrained to value stocks. He chose what he owns freely. He made the choice to buy value stocks, and beat the market, so he deserves the kudos. Slightly off-topic, here is an excellent analysis of all the factors going into Buffett's good returns (from luck, aptitude, personal contacts, family, business model, business structure, investing choices).
Passive indexers also dismiss stock-pickers' returns by arguing that their benchmark should be risk-adjusted. There is no need to. It has been known for a long time that stock returns are not explained or predicted by risk. Beta was proven useless decades ago. The Fama-French 'risk-factors' have been shown to have nothing to do with risk. And the more recent factors to explain stock returns cannot even pretend to measure 'risk'. See the discussion on the Beauty Pageant page.
Just as important as picking the correct benchmark, is correctly stating your own returns. No cheating.
- Include the interest costs of money borrowed to invest, even if it is secured by your home.
- Include the foreign exchange gains/losses in converting to the currency which you will eventually be needing. That may be your home currency if you plan to stay put in retirement. It may be a foreign currency if you are planning to move.
- Remove the effects of savings added to the portfolio and cash withdrawals.
- Include all your accounts in one calculation. Chances are you will have tried to optimize taxes by keeping different types of securities in different accounts. But dollars are dollars no matter what the account label. In retirement or in an emergency it won't matter where the cash comes from.
- Don't benchmark against your friends because it is highly likely they don't know how to correctly measure their returns and conveniently fudge the numbers.
- Don't use arithmetic averages for long-term results because that overstates the true geometric average.
- Don't use Yield-On-Cost YOC calculations that measure nothing meaningful and are meant to make you feel your returns are larger than they really are.
- Don't ignore capital gains if you have decided you are a 'dividend investor'. Ignoring feedback is putting your head in the sand. If your strategy is not performing you should know it.
METRICS FOR DIVIDEND-GROWTH INVESTORS
All the discussion above uses Total Return for measuring performance. In the 2000s, the creation of dividend true-believers resulted in the idea that their objectives and strategies require different performance metrics. All refuse to use Total Return as their primary metric. Many refuse to use Total Return at all. For them, everything is analyzed ONLY with Yield On Cost (YOC), Dividend$ Size and Dividend% Growth.
But there is a disconnect between what the gurus preach and what really matters to them, and probably to you. When given a variety of portfolio results from the choices below, and asked which performed the best, their common sense prompted them to choose the largest $50,000 Portfolio D ... even when the performance metrics they promote indicate quite different choices, and were calculated for them.
Failing to understand the point of the exercise, they felt free to ridicule the question because the answer was so obvious. But that ridicule only validates the conclusion that what really matters at the end of the day, is the Total Return - even for Dividend-Growth investors. The gurus preach the use of other metrics, but what they really value is Total Return.
It is not necessary for the point being made here, but if you like, here are the 'stories' behind the portfolios.
* The only difference between Portfolios A and B is that, on the day before measurement, A switched stocks to buy higher yielding ones. This reset its YOC back to the current yield. But now he can brag that his portfolio is throwing off the largest $$dividend income.
* B was happy to brag how his decision to buy and hold high yield stocks resulted in his portfolio having the highest YOC. The only difference between Portfolios B and C is that C chose to start with lower yielding growth stocks with a smaller payout ratio, whose management undertook to both grow the company and then increase the payout ratio. This allowed C to brag how his dividend$ grew at the fastest rate.
* The only difference between Portfolios C and D is that company management of the stock owned by D decided they could make better use of profits by reinvesting for growth, instead of paying out dividends. The trade-off worked. Although D's dividend income growth was lower. the increase in stock price more than compensated - creating the highest Total Return.
Which Performance Metric You Use Determines Which You Think Performed Best.
- Dividend Size
- You would pick Portfolio A with the largest $2,000 dividend. But why not Portfolio B? The difference was determined by one day's switch of stocks. Switching stock does not affect performance. Performance is created by stocks DURING THE PERIOD they are owned. Portfolio A simply 'put lipstick on the pig'. This metric is superficial and does not measure performance.
- Yield On Cost
- You would pick Portfolio B's 12%. But investors don't get bonus points for holding stocks without ever selling. The objective of investing is NOT to see who can hold a stock the longest. You may think that long holding periods are a good strategy for maximizing your returns, but they are never the objective. Many true-believers make a 10% YOC their objective. They base their retirement date on the assumption that a 10% YOC will cover their cash needs. But is Portfolio B really in a better position to retire? No. There is a discussion of YOC on the Valuation Metrics page.
- Dividend Growth
- You would pick Portfolio C's 12% dividend growth. But it is easy to grow fast when you start small. A company can double a small dividend easily, because growth can come from both an increase in earnings AND an increase in the payout ratio. But a company paying out 50% of earnings cannot double that to 100% of earnings without destroying all growth. This metric reflects a choice of strategy. It does not measure the resulting performance. By starting with low yielding stocks you give yourself a handicap to make the results look better.
Dividend true-believers feel that a 5% growth in their portfolio's $dividends is a better measure of success than a 5% increase in their portfolio's' $value. They are distorting dividend growth into a measure of rate-of-return. But a $dividend increase does not provide any 'return'. An increase in $dividends declared by a company can be replicated by simply switching stocks into one that pays a larger yield. Yes, an increase in $dividends may indicate that management thinks long-term profits will be higher. But if the stock price does not change, then the market believes the increased dividends will come at the cost of lower growth. It is only when the stock price increases as a result of the dividend increase, that the investor realizes a 'return' - a capital gain measured by the Total Return metric.
- Total Return
- You would pick Portfolio C with the 8% growth. This is the way mainstream finance measures portfolio performance - with rates of return that are comparable to other data. Total Return measures growth in value - value that can be used in the real world to buy more things today - or used to buy a larger income stream for the future.
It makes no difference what strategy you use. A larger ending portfolio will always give you more spending power today, or a larger income stream for the future. Only the Total Return metric measures this.
P.S. If you are thinking "Oh, this does not apply to me because I am not accumulating wealth. I am retired. What matters to me are withdrawals." Think again. Add an assumption to the story of all the portfolios, that (e.g.) $500 is withdrawn each year. What would change? The metrics for Dividend $$, YOC, and Dividend Growth would stay the same. The ending Portfolio Values cannot be measured without the year-by-year timing of returns and draws, but regardless .... Portfolio D would still have the largest ending $value. Portfolio D would still have the largest Total Return metric. The largest Ending Value allows for larger $draws today AND also provides the greatest promise for future income. Only Total Return measures this performance.
TRACKING the ACB for TAXES
Canadians must keep track of the ACB of your stocks and mutual
funds (the Adjusted Cost Base for Canadian income tax purposes).
include all costs means you will eventually pay more tax than you
should. Only securities held outside tax shelters are of concern here because profits within RRSPs, RRIFs and TFSAs are tax free. All transactions done in foreign currencies are translated into the Loonie equivalent at the exchange rate on the transactions date (not the settlement date).
You increase the ACB of your stocks when ...
- shares are purchased (either originally or additionally later). It makes no difference if they are in another broker's account. All are considered lumped together. The additional purchase is added exactly like the original purchase.
- distributions are automatically reinvested to buy more
shares. This can happen three ways.
1. DRIPs are set up to automatically reinvest all the distributions received, hence the name Dividend ReInvestment Plan.
2. ETFs and mutual funds distribute shares instead of cash in order to pass through taxable capital gains - usually at year end. With ETFs the number of shares you own may not
increase because the fund makes adjustments inside the fund. You know it has happened because your tax slip will include a capital gain amount for which you never received a distribution. These are called 'phantom distributions'.
Regardless, the distribution reinvested increases your ACB.
3. Sometimes when a corporation sells a division, it realizes capital gains that are better
realized in the hands of the shareholders. Because the company may not have cash available, they pay a capital gains dividend with shares instead of cash. Because there is no cash flow some investors ignore what is happening
'behind the scenes'. They think their original asset is simply growing in
value. In fact there are two transactions lumped together. The company distributes
dividends, then the investor uses that cash to buy more shares. Each purchase
of more shares increases the ACB by the amount of the dividend. Some brokers' do not include the $value of the transactions, only the number of shares issued. If so you should complain. At any rate the $total of the
year's distributions will be taxable and T5'd. That taxable amount will be the cost of the
additional shares purchased. The common errors resulting from not doing this correctly are discussed on the Valuation Metrics page.
- A tax loss is denied (superficial loss in Canadian tax) because
replacement shares are purchased too soon afterwards (within 30 days). In this case the
loss denied increases the ACB of the replacement shares so that it can
be claimed when they are ultimately sold. In the example below the Loss on Sale equaled $980 : = Proceeds ($3,000) less ACB (200*19.90=$3,980).
You decrease the ACB ...
- when all or some of the shares are sold. The same percent of the ACB, as the percent of shares sold, is removed. This amount goes into the calculation of capital gain for those shares sold - proceeds less ACB.
- when income trusts distribute what they call Returns of Capital (ROC). This
information is noted on your tax slips now.
- when flow-through Oil&Gas shares distribute deductible operating costs.
Staple a sheet of paper to the back of the broker's slip for the original
| ||Date ||CashFlow||#sh||ACB||ACB/sh
||b.) ||Div Reinvested||Dec||0||10||150
| ||Subtotal B4 Sale||510||10,150||19.90
|i.) ||Partial Sale||Mch||3,000||(200)||(3,980)||19.90
|c.) ||Loss Denied||(repurchased too soon)||980|
|ii.) ||ROC Dist'n Rec'd||Jun||200||(200)
| ||3:1 Stock Split||1830||10,550||5.77
Canadian Personal Income Tax returns require you to list all the securities sold during the year on Schedule 3. It is MUCH easier to update this schedule at the time of each sale, rather than at year end when you have forgotten or lost your records. The math is simply subtracting the ACB of the shares sold, from the total proceeds, to generate the gain. A calculator and piece of paper work fine. Or you can keep a simple spreadsheet.