When investing in stocks, it is very important to know how well the stock is returning. Today, we're going to cover some of the basic ways to calculate stock returns.
1. Calculate the return from changes in stock prices
This is the most straightforward and simple way to calculate the profit, i.e., to determine the profit by calculating the difference between the buy price and the sell price. The formula is:
| Gain = Sell Price - Buy Price |
If the return is greater than 0, it means that the investor is profitable; If it is less than 0, it means a loss.
2. Calculate the dividend income of stocks
In addition to the income from price changes, stocks may also receive dividends from the company. Dividend income is calculated as follows:
| Dividend income = dividend amount per share * number of shares held |
This income is distributed to shareholders by the company in a certain proportion according to its profitability. The amount of dividends is usually related to the profitability of the company and the decisions of the shareholders' meeting.
3. Calculate the total return of the stock
Combining the above two income methods can give you the total return of the stock. The formula is:
| Total Returns = Price Change Returns + Dividend Returns |
Through this formula, investors can get an accurate picture of the total return they have made from investing in stocks over a certain period of time.
4. Calculate the rate of return
In addition to the total return, investors often focus on the yield, which is the ratio between the return and the amount invested. Yields can help investors evaluate the performance of different investment projects. The formula for calculating the rate of return is:
| Rate of Return = (Total Return / Investment Amount) * 100% |
This formula can clearly reflect the return on investment and is a very important evaluation indicator.
5. Consider other factors such as taxes
In the actual investment, it is also necessary to consider the impact of factors such as taxes and fees on earnings. For example, stock trading may incur fees such as fees such as fees and stamp duty, which need to be deducted from earnings.
Through the above methods, investors can get a comprehensive picture of the earnings of stocks. However, it should be noted that investment is risky, and investors need to make reasonable investment decisions according to their own risk tolerance and investment goals.