### Time-Weighted Return (TWR) vs. Internal Rate of Return (IRR)

##### How much did you make per year on average?  Was it 1.5% (which is in the middle of 1% and 2%) or was it closer to 2% since you had more money invested then? Please note, we are referring to how much you made on year per average, because people compare the TWR and IRR, they are comparing average returns.

Spoiler: TWR has an average of approx 1.5% (in the middle of the 1% and 2%) since it does not look at how much you had invested, while IRR is higher since you had more money invested when the return was 2%.

#### TWR

##### * These two will diverge when there are large flows (impacts both) or large price swings (impacts TWR only).

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