Questions tagged [rate-of-return]

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-topic.

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5answers
9k views

Time-Weighted Rate of Return & Money-Weighted Rate of Return

Background I am trying to figure out the computational difference between Time-Weighted Rate of Return (TWRR) and Money-Weighted Rate of Return (MWRR). Let's say, I have a portfolio looking like ...
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1answer
353 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
4k 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
923 views

How do I calculate the dividend yield for Disney Co?

I'm trying to "estimate" the dividend yield for Disney (NYSE:DIS). Let's pretend stock price will stay at $57 and the tax rate is 1%. Is it really the case that after 3 years with this stock the ...
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2answers
5k views

Why doesn't changing the Discount Rate change IRR?

I have an analysis for a real estate project done and I'm changing the discount rate but IRR is not affected. I don't understand why this is...? It seems that changing the discount rate would change ...
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1answer
1k views

If I lose 20%, what rate of return do I need to break even?

If the account is down 20%, what rate of return over the next year do we need to get to be even, in other words make back the 20% we lost? The rate of inflation in this case is zero.
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2answers
108 views

What price index should I consider when saving?

I was wondering if instead of using some official index, I should calculate my own index, putting in the equation all my expenses and calculate how poorer or wealthier I get over the years. Real ...
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3answers
119 views

In need of Algebra assistance

For some reason, my Algebra is getting rusty and I need help solving for the Purchase of the following: (Sale - Const - Purchase) / (Const + Purchase) = ROI
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1answer
239 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 ...
2
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2answers
455 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 ...
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1answer
185 views

How do you calculate return on investment for a share of stock?

How do you calculate the return on investment for a single share of stock? For example, what would be the return/value of a single Google share now, if bought in January 2015?
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2answers
155 views

Understanding the personalized Rate of Return

In my 403k web site, I saw that my personalized rate of return as 4.25%. To understand it, I clicked the question mark. Your personalized rate of return (PRR) represents the specific performance ...
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1answer
63 views

Using Index Returns in Retirement Investment Planning

In retirement planning one of the inputs to a forecast is an assumption about return on investments... and there are a number of rules of thumb thrown around. 6%, 8%, something that goes from higher ...
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5answers
765 views

Formula that predicts whether one is better off investing or paying down debt

This is more of a statistics/probability question but the implications for personal finance are obvious. Let's say you have extra cash (assume tax-advantaged space is already maxed out) and are ...
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2answers
762 views

Cumulative Return between two dates

I have a table that carries data with cumulative return of some instrument. Data is described with start date, end date and cumulative return for date range (start-end): Start Date|End Date |...
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2answers
125 views

Why compare asset performance using returns, instead of using change factors?

Why do investors compare the returns of assets as opposed to the change factors of assets? E.g. comparing 6% / 4% instead of 106% / 104% to get the comparative performance of two assets. AFAIK ...
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1answer
238 views

Why adjust for inflation annually, as opposed to realising it after the holding period?

Why do investors offset their annual returns against inflation, when inflation isn't realised until the end of the holding period (when the investor is actually spending the money)? An example: ...
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1answer
48 views

What numbers to look for investment returns

I'm exploring the field of investments and would like to know roughly what numbers and estimates have to be looked at for a company that is going to become public soon. For instance, if I buy 10% of ...
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1answer
120 views

Incorrect XIRR value of installment loan? [closed]

Using a financial calculator I was able to determine the interest rate of an installment loan with principal of 14975, payments of 444.56 and 60 month term is .2557%. However, when I put the loan ...
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3answers
328 views

What return are you getting on your money from paying down a mortgage on a rental property?

If you bought a $200,000 rental home with 20% down, what is the return on investment you're earning over the full 30 year period from paying down the loan using the rental income? We will assume the ...
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2answers
1k views

How do you calculate the annualised return of your portfolio from the annualised returns of each of your funds?

I've invested in a number of mutual funds, and I've calculated the annualised return of each of them, using a spreadsheet (and the xirr function). I want to calculate the annualised return of the ...
3
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3answers
256 views

Is this Employee Stock Purchase Plan worth it when adding my student loan into the equation?

Here are the details of my company's Employee Stock Purchase Plan: An automatic 5% purchase discount off the fair market value of the stock. Payroll deductions start on July 1st. The stock purchase ...
2
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1answer
349 views

Excel formula for calculating interest rate of earning

On January 1st I invest 1238. I do this every January 1st for 20 years. At the end of 20 years (So December 31st of the 20th year), I have 32880 in the account. What's my rate of interest? By playing ...
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3answers
20k views

What does the average log-return value of a stock mean?

Assuming log-return is defined by the log of the price today divided by the price yesterday. Does knowing this single piece of information (the average log-return of a stock over a long period of ...
2
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1answer
889 views

Can you have a positive return with a balance below cost basis?

I use Fidelity for an investment. Their website says I have a cost basis of $5000.00 invested in FUSVX. Now the balance of this mutual fund (which I believe is simply market value at closing from ...
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1answer
130 views

Looking for an ROI formula, brain is broken today

This is honestly a pretty simple problem, but for whatever reason I am not able to pull it all together. I was talking theoretically with a friend and neither of us can nail down the math so I coming ...
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1answer
1k views

Calculating return on a series of stock positions with multiple uneven transactions

How can I calculate the return on a series of stock positions with multiple uneven transactions that I can compare to the equivalent buy and hold return over the same period? Random Example: Starting ...
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1answer
6k views

Converting annual interbank rates into monthly rates

I have a time series of the three month interbank rate each month. I suppose that the rate is give annually. I need these interbank rates to be on a monthly basis because I want to us these rate as a ...
2
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1answer
135 views

How is the return rate on index funds calculated?

For example, i was viewing this mid-cap index fund: http://www.bloomberg.com/quote/VMGRX:US It says the annual return is 16.41%. How is that calculated? The index has not risen enough in price over ...
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0answers
568 views

How to Calculate Annual Return of A Fund When Contribution is Irregular?

I am struggling to calculate the annual return rate for this investment. Initial Investment on 20-May-2010 $2500 Regular contribution of $250 from 12-July-2010 to 10-10-2013. Total units ...
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2answers
7k views

How is my 'Personal Investment Performance' on my 401(k) calculated?

My 401(k) shows the following: my starting value at the beginning of the year personal contributions employer contributions investment gains/losses Closing value from Yesterday Total Change Personal ...
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1answer
172 views

What type of best bank account to store your savings in?

My wife has saved up quite a bit from a job that she had. We put the money into a BoA savings account, but the returns are miserable. What sort of savings account would you recommend to put these ...
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1answer
3k views

How to incorporate dividends while calculating annual return of a Stock

When we say that the average annualized return of a stock XYZ over the last 5 yrs is 7%, how do we factor in dividends? For example, let us say, if XYZ was at 100$, and at the end of year 1, it was ...
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2answers
10k views

irr calculation on stock with dividends

I want to calculate IRR (internal rate of return) for stock purchases. Not sure if I am doing it right, hope some of you might confirm it. Lets say I bought stock JNJ in 2005, 20 shares for $50 each. ...
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1answer
2k views

Calculating historic S&P 500 returns

I'm using the S&P 500 data provided by Robert Shiller which goes back to 1871. I've then calculated the percent return for each month, the simple arithmetic average is 0.43%. Calculating the ...
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1answer
261 views

What's best investment option? Mutual fund or Property [duplicate]

I had purchased a home year ago and given it on rent. The rent I'm getting is only 5% of total cost of home while stock fund industry (mutual fund) is paying 20% minumum (reports from my country here ...
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2answers
227 views

Comparing historical performance of different accounts

I have several different investment accounts, and I'm trying to compare the historical performance between them. Some of the accounts are easy: I have a couple of different accounts that are invested ...
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2answers
2k views

Is there any real purpose in purchasing bonds?

I am new to investing, for the most part, and I have learned a decent amount about how bonds work. What I wish to know more of is simple: Is there any real profit to it, and is it worth it? From the ...
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0answers
151 views

How is the annual ROI calculated in Peer-to-Peer Investing?

I am currently looking through the data file that is provided for export by the lending club, and I am a little confused on how you would go about calculating the ROI for an investment. Just as an ...
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2answers
1k views

What makes an effective and profitable trading system

What should I aim for to achieve an effective and profitable trading system? Should I aim to get as high a percentage of winning trades as possible (ie. 100% winning trades)? Also what percentage ...
2
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2answers
245 views

Huge return on investment, I feel like im doing the math wrong

From October 11, 2011 to January 24, 2014 CannaVEST Corp($CANV) went from $.05/share to $85.55/share (171,000% increase). Knowing this that means if I were to have invested $1000 at the low and sold ...
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0answers
227 views

How are the sub-periods derrived in TWRR Daily Valuation?

I've been looking at the TWRR Daily Valuation method and I'm trying to understand how to break the total performance period into sub-periods when there are irregular cash flows. As the article ...
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3answers
2k views

How can I determine if my portfolio's rate of return has been “good”, or not?

I've invested in stocks as a hobby for the last ten years, so I'm no expert on this. But if you have contributed about $7,000 over the past ten years (like putting in $200 here and there) and your ...
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1answer
358 views

Investment Newbie - Options in India - For $10K - for 10 years

What are the investment options in India for a newbie like me. I would like to start with 500,000 INR. (5 lacs / roughly $10K). Its for a long term. I don't need this amount for 10 years. Low to ...
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2answers
1k views

ROI on Forex Trading

I have lately been reading up on what Forex Trading is and how it works. In many sources, it is described that a consistent investor can generate 15% return annually. My question is, what is this ...
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1answer
2k views

Calculating IRR with cashflows vs NAV - getting different answers

I'd like to calculate an investment's IRR by looking at the NAV/share of the investment and also by looking at the cash flows as a check. The results should be the same. The following case works ...
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3answers
569 views

Using Loan to Invest - Paying Monthly Installments by Selling Originally Bought Shares

I'm trying to determine how much profit or rate of return is required from a financial instrument, say stocks, to break even with a loan taken out for this. I'll use specific numbers to simplify. ...
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2answers
1k views

How can I figure out how much to bid on a parking space?

A nearby condo building is auctioning off 65 parking spaces within the building with no minimum bid. The condo is in the middle of the business district in my city. I'm interested in investing in one ...
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1answer
4k views

How do we correctly sum up returns

Assume I have done 8 trades and calculated the profit (or loss) of each trade: Balance PnL 100 102 2.00% 105 2.94% 103 -1.90% 101 -1.94% 98 -2.97% 97 ...
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3answers
1k views

How can I calculate yearly interest of my investment gain?

I'm trying to figure out the yearly interest of a potential investment. Lets say I invested $10 000, 13 days later i cash out and I now have $10 500. The interest here is 4,76% for 13 days. But can I ...