From:
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(I use Quicken 2006 to track all my investments.)
To measure performance, Quicken provides an Internal Rate of Return for my IRA account.
I noticed that even though the market value of my holdings ($10,000) in the IRA account is lower than the Cost basis ($12,000), the IRR is a positive number (15%).
After some research I found that IRR takes into account series of cash flows over a period of time. I am *guessing* this is causing the rate of return to be higher than what it really is.
Questions:
1. Can you explain why the Rate of Return is a positive number when in reality I have made a loss on my investments?
2. Is there any tool/website/package that will allow me to compare my current IRA value vs the value if I had put the money in a CD with X% interest? I currently do this in a spreadsheet but it is very cumbersome to maintain and also error prone.
Thank you in advance for enlightening.