Investors using the TLH spreadsheet and in particular, the SR worksheet, will find this video/audio clip a refresher in updating the Sortino and Retirement ratios. One of the first changes to make in the calculation is to update the inflation rate. The latest data shows inflation moving from 1.1% to 1.2%. Readers can find this information on a site titled, U.S. Inflation Calculator.
In the video/audio clip I used the Madison Portfolio spreadsheet, a portfolio not available to readers. The operation will be the same for your TLH tracked portfolio. I did fix one bug in the SR worksheet and that had to do with the count number. Upon further research, I found when running the semivariance calculation, one needs to count all data points, not just those points where the IRR of the portfolio failed to outperform the IRR of the benchmark. Below you will find the link to the video/audio clip where I walk readers through the monthly update. [Read more…]