Investment performance reports can be confusing because they use different calculation methods that measure performance differently. Time-weighted returns measure average returns without regard for cash flows, allowing fair comparison of managers. Dollar-weighted returns are more influenced by timing of cash flows. In an example, a portfolio had steady gains for 4 years but a large inheritance and market loss in the 5th year, so dollar-weighted return was negative while time-weighted still showed gains due to each year having equal weight. Performance standards use time-weighted returns to provide accurate comparisons across investments.