Home| Course Catalog| Career Planning

Free Online Course on Personal Finance

Site Search

Return on Investment

The return on an investment is the change in value of a financial asset or portfolio over a specific period of time; the return includes any interest, dividends, or distributions that were added to the asset or portfolio during that period of time.

The return on an investment is important because it is a measure of how much your asset or portfolio has grown over a specific holding period. Once you have calculated your return, you can compare your asset or portfolio’s performance to benchmarks. If you do not calculate your return for each of your assets, you will not be able to tell how well you are doing in your investing.

To calculate your investment return, subtract the investment’s beginning price from the investment’s ending price and then add the resulting amount to any dividends or distributions you received; then divide the resulting amount by your beginning price. Calculating your return is important because your return is a measure of how much your asset or portfolio is worth. Your holding period return (HPR) is calculated as follows:

            HPR = (Ending price – beginning price + dividends + distributions)       

                                    Beginning price

In this calculation, include all dividends and distributions received, including dividends and distributions that were reinvested into the portfolio. This “holding-period return” can be annualized to reflect the total amount of return over a year, depending on the holding period of the asset.

To calculate after-tax returns, you would deduct the taxes to be paid from your dividend and distribution amounts; you would include in your calculation only the amount of dividends that you would get to keep after taxes.

 



Our Network Of Sites:
Apply 4 Admissions.com              | A2ZColleges.com  | OpenLearningWorld.com  | Totaram.com
Anatomy Colleges.com                | Anesthesiology Schools.com  | Architecture Colleges.com | Audiology Schools.com
Cardiology Colleges.com            | Computer Science Colleges.com| Computer Science Schools.com| Dermatology Schools.com
Epidemiology Schools.com         | Gastroenterology Schools.com  | Hematology Schools.com     | Immunology Schools.com
IT Colleges.com                | Kinesiology Schools.com  | Language Colleges.com  | Music Colleges.com
Nephrology Schools.com             | Neurology Schools.com  | Neurosurgery Schools.com | Obstetrics Schools.com
Oncology Schools.com    | Ophthalmology Schools.com | Orthopedics Schools.com       | Osteopathy Schools.com
Otolaryngology Schools.com| Pathology Schools.com  | Pediatrics Schools.com  | Physical Therapy Colleges.com
Plastic Surgery Schools.com| Podiatry Schools.com  | Psychiatry Schools.com   | Pulmonary Schools.com 
Radiology Schools.com| Sports Medicine Schools.com| Surgery Schools.com | Toxicology Schools.com
US Law Colleges.com| US Med Schools.com | US Dental Schools.com

About Us Terms of Use | Contact Us | Partner with Us | Press Release | Sitemap | Disclaimer | Privacy Policy


©1999-2011 OpenLearningWorld . com - All Rights Reserved