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Old January 8th, 2009, 09:58 AM
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Question annualized return projection

Hello

Here is my problem

I want to rank my members' stock portfolios using an annualized return.

2 cases:
1) members have a portfolio which is less than a year old, their annualized return must be projected using their monthly return. Usually the first month return will not keep the same pace for a year.

2) members have a porfolio with more than a year old, so the annualized return can be computed, and will be closer to reality.

I would like to use a rate to make my annualized projection, which could take into account, the age of porftolio, giving a "bonus" to old ones and a malus to young ones, and maybe use the standard deviation of monthly results ? For example does it have sense to substract std from annualized return ?


Any idea (hope you did get something of my speech, if not feel free to ask for more details )
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