A portfolio manager begins the year with $10,000. Halfway through the year $2,000 is withdrawn by the client. The value of the portfolio at the end of the year, reflecting the performance of the portfolio, is $9,100. Clearly, the portfolio manager did not decrease the value of the portfolio by $900. Therefore, we cannot simply look at the beginning and ending values for the portfolio. Instead, we must measure the return on the amount of money invested during the period before the cash flow occurred and during the period after.