True TWR vs MWR: why your broker's return number is (probably) wrong

Photo: Aron Visuals / Unsplash

Ask five brokers "what was my return?" and you'll get five different numbers, computed five different ways. Most of that disagreement comes down to one choice: time-weighted return (TWR) or money-weighted return (MWR).

The short version

• TWR measures how well your investments performed, stripped of the effect of when you added or withdrew cash. It's what fund managers are judged on.
• MWR (a form of IRR) measures how well you performed, including the effect of your timing: buying more before a rally, or panic-selling before a recovery.

Neither one is "more correct." They just answer different questions. The problem is when a platform shows you one number labeled simply "return," without telling you which one it is.

Why it matters

Say you added a large cash deposit right before a strong month. Your MWR will look great, not because your stock picking improved, but because your money happened to be in the market at the right time. TWR strips that out entirely, which is why it's the fair way to compare your performance against a benchmark like the S&P 500.

What Cresori does

Cresori computes both, side by side, for any date range. You get to see your actual investment performance (TWR) and how your timing helped or hurt (the gap between TWR and MWR), instead of one blended number that hides which is which.