I have a question which I'm hoping someone can shed some light on. I decided to tally up how many funds I had deposited into Robinhood over the time I have used the app through the completed transfers sections. The number was nearly $5,000 short of the current net worth of my portfolio.
In terms of 'realized profit' over the lifetime of trading securities on RobinHood, I am $700+ in profit. Can someone help me understand this discrepancy? I have not made any significant withdrawals from this account, so not sure why I am down in actual value. This $5,000 delta is not visible in my portfolio either.
Posted by uvotm9
2 Comments
If your portfolio value is $5000 more than your total deposits and you have $700 in realized gains with no withdrawals, it means there’s $4300 in unrealized gains. It will not become realized gain until sold (and it would also become a taxable event).
I’ve tried to explain this to a few clients like this; not all of them “got it” so maybe the lecture still needs some cleaning up. See what you think.
Suppose the starting value of your portfolio is $1000. Later, it’s $1200. What happened?
Well, you’d think that you could derive it like thusly:
Starting ± Addns/ ± Invest = Ending
Value Subs Perform Value
Problem is, you can’t **know** “Investment Performance”. You can only **derive** InvPerf from the other three values, which you CAN know. Consider:
* Starting Value $1000, ending value $1200, no deps/withdrawals?
* Investing Performance must be +$200
* Starting Value $1000, ending value $1200, $100 deposit?
* Investing Performance must be +$100
* Starting Value $1000, ending value $1200, $100 withdrawal?
* Investing Performance must be +$300
* Starting Value $1000, ending value $1200, $500 deposits?
* Investing Performance must be **-$300**.
* Starting Value $1000, ending value $800, $300 withdrawals?
* Investing Performance must be **+**$100 (even though ending bal is lower)
That should help “the math to add up”.