How do I calculate compounded annual return on investment for a stock
portfolio that has been active for the past five years and has the
following transaction history:
1) Cash deposits are made in varying amounts sporadically throughout the five years
2) Stocks were bought and sold sporadically throughout the five years
3) Brokerage fees were charged in varying amounts for stock transactions
4) Dividends were paid for some of the stocks held throughout the five years
5) Interest income was paid for holding a cash balance in the
brokerage account in varying amounts throughout the five years
6) No cash withdrawals were made during the life of the portfolio

That will be an ugly calculation since your investments were sporatic.
 The only way to get a reasonable number is to calculate each
additional investment as it's on separate investment:

ie...  you started with $1000 in Dec 01 then added $200 in Sep 03 then
added $250 in March 04 and now in Dec 05 you have $2000 looks like
this:

$1000 * (1.x)^4 + $200 * (1.x)^2.25 + $250 * (1.x)^1.75 = $2000
x = yearly interest rate
the ^4, ^2.25, ^1.75 is the number of years that the investment grew
at that interest rate

I'm sure someone knows how to simplify this equation, but I sure
don't.  With my own investments, I do this in Excel and simply
goalseek to find x... it works quite well but you have to know Excel
well to make it happen.  If you're not an Excel wiz you can just plug
in a number that you think is reasonable and raise/lower it as needed
until you get the right answer.

Best of luck to you!

Here's the approved method for doing the calculation.  It is published
by the CFA Institute which awards the watermark designation in the
investment profession.  These standards are the best practices.

http://www.cfainstitute.org/cfacentre/ips/pdf/GSCalcMethRevised.pdf

I use this for my personal portfolio in excel.

Thanks seshadrinathan-ga!

It's there any way I could get you to share your spreadsheet with me?

If so, please email it to me at kchua000@yahoo.com.  Please let me
know if we could work something out.  Thanks.

  kch