lukestein’s avatarlukestein’s Twitter Archive—№ 2,114

  1. 1/5. So here are a few news articles about the S&P 500’s performance last year. And some slides from my undergrad Principles of Finance class. Pop quiz: What was the rate of return on S&P 500 stocks in 2018? WRONG ANSWER: –6.2%. Because dividends.
    oh my god twitter doesn’t include alt text from images in their APIoh my god twitter doesn’t include alt text from images in their APIoh my god twitter doesn’t include alt text from images in their APIoh my god twitter doesn’t include alt text from images in their API
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    1. …in reply to @lukestein
      2. I use a cool portfolio visualization tool called @PersonalCapital to let me see what’s going on with my various investments and compares to benchmarks👇. Wait a second! Even though the S&P 500 *index* fell 6.2% last year, those stocks paid about 1.8% in dividends. R≈-4.4%!
      oh my god twitter doesn’t include alt text from images in their API
      Permalink On twitter.com Twitter logo lukestein’s avatar ♻️ 4 Retweets ❤️ 4 Favorites Mood +1 🙂
      1. …in reply to @lukestein
        3. I started to worry that @PersonalCapital was benchmarking *returns* against a *price change*. You can imagine why an advisor¹ might want to set themselves up for an unfair fight by ignoring stocks’ ~1.9% div yield. ¹I don’t use PC for advice, just viz. @lukestein/1112947221115232256
        Permalink On twitter.com Twitter logo lukestein’s avatar ♻️ 4 Retweets ❤️ 2 Favorites Mood -5 🙁
        1. …in reply to @lukestein
          4. But the story has a happy (?) ending: @PersonalCapital apparently *also ignores dividends in calculating MY performance* 🤦‍♂️ Comparing this to SPX is a (rotten) apples-to-(rotten) apples comparison. And PC is implicitly penalizing premium bonds and high-DY stocks.
          oh my god twitter doesn’t include alt text from images in their API
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          1. …in reply to @lukestein
            5/5. It’s not always easy to get finance right. (Even personal finance. Especially personal finance?) It’s not easy to get UX right. But as a producer or consumer of personal finance data, you should know what your data is, and think about the pitfalls of misinterpretation.
            Permalink On twitter.com Twitter logo lukestein’s avatar ♻️ 4 Retweets ❤️ 13 Favorites Mood 0
            1. …in reply to @lukestein
              Return ≠ price change bonus tweet, now with ∞% more animated gifs!
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              1. …in reply to @lukestein
                Arithmetic average ≥ geometric average, animated gif edition
                Permalink On twitter.com Twitter logo lukestein’s avatar ♻️ 4 Retweets ❤️ 2 Favorites Mood 0