This blog article explains in greater detail how to determine stock portfolio performance based on units of NAV (Net Asset Value). I made a similar blog article before (Calculate your stock portfolio performance with Net Asset Value based on units in excel) and the questions I got from that article are answered in this article.

Day 1 - Deposit money

Today you deposit \$100 000 to your account. In this example I use a 1000 NAV units but you can use any number you like here. NAV / unit is \$100 000 / 1000 = \$100

Day 2 - Buy a stock

On the next day you buy 50 Google shares and they cost \$1000 each. You pay \$10 in commission. You now have  \$100 000 - 50*\$1000 -\$10 = \$49 990 in cash in your account. The stock is worth \$1000*50 = \$50 000. Your account balance is \$50 000 + \$49 990 = \$99 990.

You have 1000 NAV units and the NAV / unit is now \$99 990 / 1000 = \$99.90.

Portfolio performance is 1 - 99.9/100 = -0.1%. Why did the stock portfolio decrease in value? You paid \$10 in commission.

Day 3 - Withdrawal

Google share price is today \$1010. Your stocks are now worth 50 * \$1 010 = \$50 500. You have \$49 990 in cash and your account balance is \$50 500 + \$49 990 = \$100 490.

NAV / unit is \$100 490 / 1000 = \$100.49. Portfolio performance is 1 - 100.49/100 = 0.49%

You have \$49 990 in cash and you have decided to withdraw \$20 000 from your account. The cash is now \$49 900 - \$20 000 = \$29 990. A deposit or withdrawal affects your NAV units. How many NAV units?

\$20 000 / \$100.49 is approximately 199.02 NAV units. 1000 - 199.02 is approximately 800.98 NAV units.

Despite the fact that the account balance is lower than before, your stock portfolio performance is up 0.49% from day 1.

Day 4 - Dividend

You receive a dividend \$10 per share. 50 * \$10 = 500. Your cash is now \$29 990 + \$500 = \$30 490.

Your Google shares are now worth \$1 007 per share. 50 * \$1007 = \$50 350. Your account balance is \$30 490 + \$50 350 = \$80 480

Dividends affect NAV / unit. NAV / unit = \$80 480 / 800.98 is approximately \$100.48

Day 5 - How is your stock portfolio doing today?

Google is now at \$1050. \$1050 * 50 = \$52 500. Your have \$30 490 in cash. \$52 500 + \$30 490 = \$82 990.

\$82 990 / 800.98 is approximately \$103.61. Your portfolio is up 3.61%

Day 6 - Deposit \$20 000

Google is now at \$980. 50 shares * \$980 = \$49 000. Your have \$30 490 in cash.  \$49 000 + \$30 490 = \$79 490. NAV  / unit is \$79 490 / 800.98 = \$99.24. Your portfolio is down -0.76%

Deposits affect NAV units. \$20 000 / 99.24 is approximately 201.23 NAV units. 800.98 + 201.23 = 1002.50 units

You now have \$30 490 + \$49 000 + \$20 000 = \$99 490

Day 7 - Sell stock

Today you sell Google stock at \$1100. 50 shares * \$1 100 = \$55 000. You have \$50 490 in cash - \$10 in commission + \$55 0000= \$105 480.

Selling a stock affects NAV / unit.  \$105 480 / 1002.50 is approximately 105.22

Day 8 - Short selling a stock

Today you sell 100 shares of Caterpillar at \$70. \$105 480 -\$10 = \$105 470. NAV / unit is \$105 470 / \$1 002.50 = \$105.22

Day 9 - How is your stock portfolio doing today?

Caterpillar is at \$71. \$70*1000 - \$71*1000 = -\$1000. \$105 470 - \$1000 is \$104 470

\$104 470 / \$1 0002.50 = \$104.21. Portfolio is up 4.21% from date 1.

Today you repurchase 1000 shares of Caterpillar at \$60. \$105 470 + \$70*1000 -\$60*1000 -\$10 = \$115 460.

\$115 460 / \$1002.5 = \$115.17

The stock portfolio is up 15.17% from start.

### Remember

1. Deposits and withdrawals change NAV units
2. Stock value, dividends and commissions change NAV / unit