IRR Calculation vs others

[Crystal H.]

I'm curious everyone's thoughts on using IRR to evaluate deals vs some of the other calcs that are seen more often.

As (new) buy and hold investors in our early 40s, my husband and I are far less concerned with what happens in the first 12 months of an investment and more concerned with the medium to long term horizon with our investments (5+ years.) I feel like using CoC is absolutely helpful on some level, but doesn't get to the end result of holding something over a long period of time and then realizing the benefit of it by selling in the future.

One answer as to why investors don't look at it as much is because I've read many people don't like to bank on any appreciation. However, when I'm deciding whether to invest in the stock market vs real estate, I sort of HAVE to take an educated guess at what the returns will be on each to make my decision. If I leave my cash in the stock market, I'm banking on X% return there, which is also a guess. And, when I'm doing an IRR calc, I'm extremely conservative (3%/year, even in this market.)

Another possibility is that it's too much trouble to forecast out and people are uncomfortable with the assumptions you have to make. Totally fair. I have taken a few personal finance courses in studying to get my CFP accreditation so am comfortable using these calcs and putting the time in to do them properly.

What is your take? Is anyone using IRR to evaluate deals? Very new to this world so could absolutely be missing something here... :)