Why Deposits Don’t Improve Investment Returns
Summary
Hollow Point Trading shares a video explaining why a larger ending balance does not necessarily mean a higher investment return. A hypothetical account grows from $100 to $110, then receives a $100 deposit, showing how cash flows can raise the balance without improving performance.
https://youtu.be/1v9ntI5VOTg
A deposit can grow your balance without improving your return #Time...
A larger ending balance does not by itself measure investment performance. Imagine a hypothetical account starting at one hundred dollars. It grows to one hundred ten before any cash flow, a ten percent return. Deposit another one hundred dollars immediately after that valuation. The account now holds two hundred ten dollars. In the next subperi...
