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9

It depends which 3 years (and which 15). If you had bought the S&P500 index fund in the 2004-2005 time range, your 3 year returns would be small, nothing, or even negative, depending on how exactly you timed it, whereas waiting 15 year (until about now) would have more than doubled (nearly tripled, again depending on exact timing) your investment. See ...


8

This is a basic arithmetic. If investment A and investment B both provide a 20% return and investment A provides 4 times the dollar return than B then one must invest 4 times as much in A. Given that they provided the same return, neither investment was better than the other.


8

"the average return for 3, 5, 10, 15 years is 9%, 8%, 13% and 7.6% respectively" I suspect this really means that the returns using the S&P average over the previous 3, 5, 10, 15 years is … . The answer you are quoting from seems to be simply giving examples of how the market has performed recently in order to give an idea of what is a reasonable ...


7

What you are not considering here is the financial leveraging of the equity-based gain. Leveraging refers to the fact that using loaned money to invest, increases the punch of your equity dollars. As long as your earnings are higher than the interest you pay on the loan, you end up with a higher rate of return. Assume I pay $100k for a house, in cash, and ...


6

So would it be better for me to keep the money in South Africa or would the interest gains be wiped out by the fact the Rand gets weaker by the year, and therefore would be better for me to transfer the money to the UK? This is opinion based. Generally you are right, the high interest rates in a country is off-set by the currency rates on a long term ...


6

ROI (Return on Investment) is a simple percentage. https://investinganswers.com/financial-dictionary/technical-analysis/return-investment-roi-1100 The return on investment formula is: ROI = (Net Profit / Cost of Investment) x 100 But the word "rate" in ROR (Rate of Return) means that it involves time. https://investinganswers.com/financial-...


5

The calculation is product. Given monthly returns X%, Y%, Z%, quarterly return Q% is calculated as: Q% = ((1 + X%/100) * (1 + Y%/100) * (1 + Z%/100) - 1) * 100% Using the numbers from the question: Q% = ((1 + 56.12/100) * (1 + 15.00/100) * (1 - 2.27/100) - 1) * 100% = = (1.5612 * 1.15 * 0.9773 - 1) * 100% = 75.46%


3

Exactly how would you keep the money for yourself? In actual, physical cash? That has a non-trivial risk of being stolen. For many private investors, the better option is to keep the money in a bank account. That just costs a small amount in fees. But with the current interest rates, don't expect to receive much if any interest. And this is likely not an ...


3

Running through the calculations s = 225000 p = 25000 r = 0.04/12 n = 30*12 d = r (1 + 1/((1 + r)^n - 1)) s = 1074.18 paid[y] = 12 y d value[y] = (s + p) (1 - 0.08) (1 + 0.05)^y balance[y] = (d + (1 + r)^(12 y) (r s - d))/r gain[y] = value[y] - balance[y] - paid[y] annret[y] = 100 ((gain[y]/p)^(1/y) - 1) Plot of Value, Balance & Gain Plot ...


3

Why would I want my net present value of a project to be $0.00, or break-even? You wouldn't. IRR is only useful to compare to your required rate of return, or the rate or return of other investments of equivalent risk. So if one investment has an IRR of 10%, but you can invest in other projects of similar risk that earn 20%, you would choose them over ...


3

Note: edits to the question are quickly adding details and changing the validity of my answer here. Presumably, the dividend is part of the 10% return for the year, no needing to account for it separately. To adjust for “real” return, I’d multiply that $110,000 by .97 and that results in an inflation-adjusted return. If, in fact, you meant to say that at ...


3

(1+return)/(1+inflation)-1 would be more accurate (it discounts each year's return by the level of inflation), but your formula is often used as an easy estimate for small levels of inflation: (1.11 / 1.015) - 1 = 9.36% which is fairly close to the 9.5% you use. To convert to monthly raise it to the 1/12 power: (1.11 / 1.015)^(1/12) - 1 = 0.748% which ...


3

You are talking about two concepts using different terms. The standard financial terms when talking about inflation are "real" return and "nominal" return. "Nominal" return is just the actual mathematical return, not adjusted for inflation or anything else. "Real" return is your return after adjusting for inflation. Since the things you can do with your ...


3

Here is a DRIP calculator that allows you to compare the performance of ETFs and stocks with and without dividend reinvestment. You have to do them one at a time: https://www.dividendchannel.com/drip-returns-calculator/ There are lots of screeners available. For example, you can look up various ETF performance stats at: https://etfdb.com/etfs/ Finviz ...


3

I know that my logic is missing something crucial as I always assumed that the longer you leave your money for the closer it approaches to the long term average return. If you can get 9% a year for 3 years, but 7.6% a year for 15 years couldn't you just do the 3 year hold 5 times? The error in this logic? How will you know when to buy and hold for only 3 ...


2

I know this is an old post, but the answers given earlier are incorrect. Annual Percentage Yield (APY) has very specific definition spelled out in Federal Regulation DD (Truth In Savings). What APY is not (not Necessarily at least): a calculation of the interest you will actually earn. What APY is: Minutia defined by Federal Reserve Reg DD assuming a 365 ...


2

If you get 5% return per trade you'll get 1.05^100 = 131.50 So if you start with 1,000 you'll have $1,000 * 131.50 = $131,500.


2

Did we try to validate the Annualized TWR the correct way? No - that validation would work if you calculated IRR, but not TWR. Since you have larger returns in the early periods and smaller returns in later periods (when the balances are larger), adding the same return to each period will give you a different end result. Also, I think your formula for ...


2

In general, the value of a company is determined by the "expectation of future dividends". If someone sets up a company that sells $2 widgets, that cost $1 to make and they sell 1,000 of them per month, the company is receiving a revenue of $2,000 per month, with expenses of $1,000 per month. The $1,000 that is left is profit, which could be given to ...


2

4 years seems a little high for a break-even point. One rule of thumb I've seen is that you should refinance if you can reduce your rate by 1% or more. I assume you're rolling your closing costs into the new mortgage, which increases your principle and raises your payment, lessening the improvement. If you can afford to pay $2,100 per month, then look at ...


2

According to Morningstar, the monthly returns for SPX were: January February March April May June 2019 7.87 2.97 1.79 3.93 -6.58 6.89 The problem is that you either have bad data from AlphaVantage or your data query from AlphaVantage was incorrect. Monthly return is not calculated from the opening ...


2

Isn't the decision at this point weighed on the dollar amount of gains? Not necessarily. Each has the same percentage return but other variables could some into play. How much capital do you have total? What are you going to do with the capital that you don't spend? For example, suppose you have $200 total to invest. You also find Investment C with a 30% ...


2

Return refers to (New Price - Old Price) ÷ Old Price and is expressed in %. Once you have gathered the daily returns of a stock (e.g. 250 days) and the daily returns of the broad market index of the appropriate industry or country, you will notice that when market goes up, the stock also goes up by a certain ratio (also known as Beta). Suppose on average ...


2

Look at it this way. Let's say you invest $100,000 in bonds issued by 100 different companies. (Large, round numbers because those make it easier to do calculations.) The average bond returns 7% per year. Without any credit events, after the first year, you will have collected $7,000 (7%) in interest payments, thereby having a grand total of $107,000. Now ...


2

The most precise calculation with the given information would be the internal rate of return (IRR). A time-weighted return would be better, but that would require the investment values at 30 & 50 days. https://en.wikipedia.org/wiki/Rate_of_return#Internal_rate_of_return I.e. Solve for x ∴ x = 13.9461 % over 68 days Annualised = (1 + 0.139461)^(365/...


2

If your return for say, one month, is r = -100 % your future value on investment a is FV = a (1 + r) = a (1 - 1) = 0 and the annualised return is (1 + r)^12 - 1 = 0^12 - 1 = -100 %


2

Actually, you would take the Dec '13 adjusted close, not the Jan '14 adjusted close, otherwise you'd leave out one month of returns. But the formula would be End. Adj. Close - Beg. Adj. Close -------------------------------- Beg. Adj. Close or End. Adj. Close --------------- - 1 Beg. Adj. Close


1

I think that you are double counting. A dividend is a return of your investment. It does not provide Total Return because the stock exchanges reduce share price by the amount of the dividend on the ex-div date (as Joe alluded to). IOW, if you have a 100 shares of a $100 stock worth $10,000 that pays a 4% annual dividend, on the ex-date you will have 100 ...


1

NOTE: I am not a financial advisor but the question intrigued me and I have wanted to try to find something similar too. Your modification would imply that you took all the eventual $X and invested in the beginning. So the CAGR is bound to mislead with that. I was looking into different mathematical series to be able to express this but that can be left to a ...


1

Mark-to-market accounting is needed. Just regularly update the intermediate value of the options and compare gain/loss to the beginning year balance. However, it's necessary to allow for deposits and withdrawals. For instance, deposit is not gain and withdrawal is not loss. Also, the effect of a large deposit or withdrawal can immediately change the ...


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