Can someone explain me in simple terms what is TWR (Time Weighted Returns)?
I am not sure if I got it correctly.
It looks like a way to calculate if your portfolio is performing well or not if you have made several deposit during the time you measure it.
I am asking because IB is showing me 1.2% (and a MWR of -50%!) and I don’t understand where it comes from. I thought it’s for example when:
january: I invest 10 in IndexA
february: I invest 10 in indexA , IndexA made 1.5% gains.
in march indexA from beginning of the year is 2%,.
At this point the TWR is not 2%, since I invested part in january, part in february. It’s calculated somehow.
Is it the reasoning correct?
The weird thing is that IB is giving me a positive value, but if I check how much I put into my account and how much I withdrawn, it’s value is bigger than the total value of my account now.
So right now I am confused about that TWR and also upset that I don’t see on IB an easy way to see the difference between the actual value and the amount of money deposited/withdrawn.
Or I’m just too tired.
Hopefully this will help some other people and not just me.