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For questions relating to various measures of the rate of return on an investment, e.g. Internal Rate of Return, Financial Management Rate of Return, etc. Note that questions about these terms that don't apply to personal finance or actual problems you face, e.g. homework questions, are probably off-...

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How are net income and yield calculated for margin trading?

You have purchased 150 shares at 10 each. You expect to sell these at 15 each. You only managed to sell 100. Out of your initial purchase price, 400$ were borrowed. Brokerage fee= 2% for the ...
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1answer
32 views

calculate performance vs. buy and hold for a period

If I know the daily performance of an investment strategy vs. buy and hold for a certain number of days, how can I get the performance over an entire period? For example: day 1) vs. Buy hold = 3% ...
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2answers
124 views

Do SPY prices include dividends?

I'd like to calculate the return of SPY over a range of time. For example: 5/1/18: 264.98 9/14/18: 290.88 264.98 - 290.88 = 25.9 25.9/264.98= 0.0977 = 9.77% Does the 9.77% return include SPY ...
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1answer
86 views

How should you calculate the average daily return on an investment based on a history of gains?

I started an Acorns account several months ago to use as a glorified savings account. I don't make contributions on purchases, but I contribute 10% of my paycheck to it every two weeks (Richest Man ...
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2answers
63 views

How to factor dividends into SPX returns?

I'd like to calculate the return of the SPX from March 1, 2018 to July 31, 2018 with dividends included. SPX pays out a 1.80% dividend: https://www.investopedia.com/ask/answers/040915/does-sp-500-...
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1answer
108 views

Rate of return on a loan

If I lend you $100 at, say, 10% annual interest for a 3 year term (36 months), your monthly instalment (usual amortization schedule) should be $3 per month for 36 months, for a total of $116, right? ...
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2answers
140 views

How do I calculate the ROI for a rental property I've owned (mortgaged) for about 15 years?

We own a two family house and both parts are being rented. We moved out years ago and now live with extended family... "temporarily." Trying to figure out the best financial route while getting into ...
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1answer
362 views

IRR Calculation with multiple investments

Most of the times, most of the searches are returning the IRR calculation just based on a single initial investment. Imagine you have a plan that asks investors to supply money not only once, and you ...
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0answers
25 views

What is the relationship between the discount rate and the rate of return on a project? [duplicate]

These terms are used quite interchangeably. For example, the expected return in the CAPM model is used to estimate cost of equity. Edit: My question is asking about the expected rate of return r is ...
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1answer
92 views

UK bond yield below inflation rate means negative ROI likely if held until maturity?

Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds ...
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1answer
450 views

Is this how to calculate annualized return?

For a savings account that is returning 2.0 APR, on $10,000, $200 in interest will be earned in one year. If I have a return of 9% on a stock trade with a holding period of 3 months, is the ...
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4answers
140 views

Real estate repair: Out of pocket or on credit?

You often hear the advice, that you should eliminate all debt, before starting to invest. However, in the following scenario it seems the opposite to be the right decision: In order to be rented out,...
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1answer
231 views

It seems dividend growth stocks would take decades to return 100%, so what is the point? [closed]

What is the point of dividend growth stock, it yields low and the value needs to have high yield are mostly unreachable by many people. Here I will brief an example. Let's say Walmart has dividend ...
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1answer
81 views

Why do so many tools and sites not show total returns of mutual funds?

My understanding that the total return of a fund is the NAV capital return plus the income return (dividends, etc). It seems to me that (outside of tax implications) total return is the most critical ...
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3answers
570 views

Can money work that hard for you?

Yesterday I was thinking about this: Assume you have around 600.000€, and get around 10% to 25% annual return on a fairly aggressive fund investment. Now assume that each year you take out 80.000€ ...
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1answer
50 views

Where can I find total returns for UK stocks [closed]

I understand the formula for total return, i.e. year close minus year open plus dividends all divided by year open price. But I can't seem to find the total return on Yahoo UK finance for a stock, or ...
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2answers
362 views

How to calculate return for “negative” investment

I'm tracking a few investments, with a simple formula for total (non-annualised) return, which is (current_value - money_invested) / money_invested. For one of my investments, however, I already ...
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1answer
48 views

How to calculate internal rate of return [beginner]

I am an informatics student who was given an assignment to do with finance and we're not very financially literate. We are asked to theoretically build a platform to mimic bond exchanges. As part of ...
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1answer
1k views

How do I annualize returns for less than one year? [closed]

I know that it's not good to annualize returns for less than one year but wanted to know how to annualize monthly returns from February 28, 2017 to October 31, 2017. Only the February return is not a ...
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3answers
247 views

Dalbar: How can the average investor lose money?

Dalbar publishes the Quantitative Analysis of Investor Behavior (QAIB) annually. In it, several claims are made, the most common of which is that the average investor consistently under-performs the ...
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4answers
3k views

Shouldn't a Roth IRA accumulate more than 1 cent of interest per month?

Ten months ago, I opened a Roth IRA with an initial principal of $1,000, invested in one of those "Target Date" retirement mutual funds. I also set up $100 automatic monthly contributions. The ...
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1answer
92 views

Annualized Rate of Return on Stock Purchased in Tranches

I am a retail investor investing directly in equities in the Indian stock markets. I would like to understand the correct way to compute the return on particular stocks in my portfolio, which I have ...
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1answer
75 views

What is an accounting term that factors growth as a function of time and discount rate?

Bare with me, as I don't know how to properly describe what I'm asking for. Please edit the question if it can be asked in a way that uses correct vocabulary. I might be just asking for an compound ...
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4answers
147 views

Calculating Average Rate of Return

I'm trying to figure out how to calculate the average rate of return on some investments. I'm doing this because I'm trying to assess the impact of fees. In my theoretical scenario, let's say that I ...
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6answers
2k views

How can I calculate total return of stock with partial sale?

I have searched the internet for hours and still can't find the formula to calculate the Total Return in percentage with the below scenario. Bought 310 shares at $3.15 brokerage $19.95 Sold 200 ...
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2answers
140 views

Clarify Microsoft's explanation of MIRR

I don't understand Microsoft's MIRR example. The second parameter is the finance_rate: Finance_rate Required. The interest rate you pay on the money used in the cash flows. The example then ...
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4answers
397 views

When investing, is the risk/reward tradeoff linear?

Rule 1 of investing is that the more risk you're willing to take, the higher your potential for reward. Bonds are low-risk and come with maybe 1-2% returns, stocks much higher risk and maybe 5-15% ...
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1answer
3k views

How to calculate the return over a period from daily returns?

If I have daily returns of my portfolio over a period (let's say January to December), how do I calculate the total return over the period or per month? What I did now is the following: Calculate ...
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1answer
82 views

What is the rate of return for a security when there is no risk-free rate (CAPM)?

Let say I want to invest 1000€ in cryptocurrencies in order to get 2000€ In the famous CAPM, the relationship between risk and rates of returns in a security is described as follows: For a security ...
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1answer
627 views

Annualized Return vs CAGR of Investment

I am a bit confused by the the two terms 'Annualized Return' and 'CAGR' (compounded annual growth rate). The definition for annulized return is here. The definiton for CAGR I have taken from here. My ...
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2answers
591 views

Investing/business with other people's money: How does it work?

I have heard of this phrased such as "OPM" -- basically, "other people's money." It's something said that, if you don't have the funds necessary to invest, use someone else's money. What does this ...
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2answers
249 views

Are stock investments less favorable for the smaller investor? [closed]

I believe it's a basic sense of math: more in, more out; less in, less out. If the little guy can't put as much in, he'll get not as much out; if the big guy puts much more in, he could get much more ...
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4answers
175 views

Why is IRR used as a measurement of an investment's profitability?

I am new to money.SE so please forgive if this question is not in keeping with the norms of the site, and let me know how I can improve it. I have a fundamental question about concept of internal ...
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2answers
668 views

Calculating returns on a stock: different ways?

I am comparing two ways of calculating the total return on one stock over time and I would like to know if they both make sense. When would you use one over the other and do they have specific names? ...
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1answer
441 views

How are average annual returns calculated on an index fund?

I am trying to understand the average annual returns on this index fund: VFTSX according to its data on Vanguard's Price & Performance page. It shows, under "Average annual returns", the ...
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2answers
141 views

Calculator to compare mixed portfolio returns [closed]

I've had my IRA in Betterment for the past 2.5 yrs. Betterment invests in low fee ETF's only and charges 0.15%/yr in fess. They allow the user to manage their portfolio only by changing the ...
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1answer
99 views

How do you calculate the RRR on a portfolio given component returns?

Imagine you invest in the following stocks: $11,600 of A, $7,800 of B, $14,900 of C, and $3,200 of D. The required returns on these stocks are 10.7%, 15.4%, 3.9%, 9.1%, respectively. What is the ...
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2answers
132 views

Should monthly return or annualized be used?

If I have an average monthly return on capital of 5%, is it more common to use that number for performance or use the annualized value of 60%? I believe the annualized value is what hedge funds and ...
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7answers
5k views

Are Certificates of Deposit worth it compared to investing in the stock market?

Looking at roughly 0.05% for a CD to 5% for a stock portfolio. That's a huge difference in return. For example, with $10K, that's a 4.95 percentage point difference! In general, does a diverse ...
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2answers
48 views

Return calculation on a security that you are rebalancing

Suppose you have some security A, and the suppose the following: Initial amount of security bought: 100 Initial price: $10 Suppose after some time: Sold qty: 10 Sold at: 11 Then you buy some ...
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2answers
1k views

“Rule of 72” For Higher Multiples?

The rule of 72 states that if I earn n% interest, I can divide 72 by n and get the approximate number of years that I'll double my money. Suppose that I wanted to find out how many years to quadruple ...
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1answer
442 views

XIRR not working for this dataset. Any other method to calculate rate of return?

For this particular dataset xirr is not returning any reasonable value either in excel or google spreadsheet. What is the option to calculate the rate of return in cases like this?? Sl-no date ...
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4answers
3k views

Does investing more money into stocks increase chances of profit?

Assume someone wanted to invest in stocks for the sole purpose of profiting as soon as possible. Given the risky nature of stocks, would investing bigger amounts of money increase the chances of more ...
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1answer
260 views

When I calculate “internal rate of return (IRR)”, should I include cash balance?

When investing in the stock market, some methods need a cash balance in the broker's account. For example, a new investor has $20,000 to invest. She buys stock worth $10,000. The remaining $10,000 is ...
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3answers
758 views

Should I be disappointed with my investment returns?

I put $46,000 in an IRA 10 years ago. I have never made any additional deposits. The value is now $58,000. I feel it should be worth more. All of it is in mutual funds.
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3answers
331 views

Accepting high volatility for high long-term returns

According to modern portfolio theory investors can pick a trade-off between expected returns and volatility along a certain curve. If someone is investing for the very long term (decades until ...
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1answer
299 views

How to compute real return including expense ratio

I am currently hesitating between 2 similar International Index Fund, FSIVX and FIENX. FSIVX have an expense ratio of 0.12% while FIENX have 0.63%. I can try to compare them side by side on google ...
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3answers
2k views

401k compound interest vs other compound interest

Whenever I see the presentations or documents imploring me to invest in 401k and retirement, it always shows a nice graph showing a 7% compound interest and how less money saved earlier in your 20s ...
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1answer
214 views

What's the folly with this stock selection strategy

I am very leery of investing in Stocks over here. I have tested some other Asian markets and gotten some returns. Rather than have my money depreciate (less interest than Current Inflation ), I'd ...
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2answers
356 views

difference in cagr and irr

I am trying to understand the IRR, XIRR and CAGR functions better. See the link below for my examples. I am looking at a very simple example of 20K invested and 50K returned at the end of an ...