Calculating the percentage gain of your investment is quite easy. All it takes is a little bookkeeping and either a simple calculator or a pad of paper for doing the math.
Determining percentage gain or loss
- Take the amount that you have gained on the investment and divide it by the amount invested. To calculate the gain, take the price for which you sold the investment and subtract from it the price that you initially paid for it.
- Now that you have your gain, divide the gain by the original amount of the investment.
- Finally, multiply your answer by 100 to get the percentage change in your investment.
If the percentage is negative, resulting from the market value being lower than the book value, you have lost on your investment. If the percentage is positive, resulting from market value being greater than book value, you have gained on your investment.
Here is what the formula looks like:
(Price Sold - Purchase Price) ÷ (Purchase Price)
For example, if you bought 100 shares of Intel Corp. (INTC) @ $30/share on May 18, 2016, your total investment value is $3,000. If you sold the 100 shares on May 17, 2017, for $38/share, your proceeds from the sale would be $3,800. Your realized gain can be calculated as ($3,800 - $3,000) / $3,000 = 26.67%. Alternatively, you can calculate your gain using the per share price, which would look like ($38 - $30) / $30 = 26.67%.
If you just want to know how much loss or gain you've made so far without selling, the same process works and you can use the current market price in the place of the price sold, but the gain (or loss) calculated would be an unrealized gain (or loss).
This basic formula is used every day to find out exactly how many percentage points indexes, stocks, interest rates, and so on have changed over a given period of time. For example, if the Dow Jones Industrial Average (DJIA) opens at 24,000 and closes at 24,480 today, the formula would show that the percentage change over the day was 2.00% [(24,480 – 24,000) / (24,000)].
Factoring in costs and any income or distributions
Investing does not come without costs and this should be reflected in the calculation of your percent gain or loss. The above is an illustration of the calculation without costs, such as commissions and taxes.
To incorporate costs, reduce the gain (market price - price purchased) by the costs of investing. By incorporating these costs you will get a more accurate representation of your gain or loss.
Also, if your investment paid out any income or distributions, such as a dividend, you will need to add this amount to the gain amount.
Here is a more detailed way to calculate gain or loss:
[(Amount Sold - Amount Paid) + Income Gain - Costs] ÷ Amount Paid
New Articles:best place to buy vietnamese dong how to earn american express points hulu movie selection irs installment agreement interest rate best dental insurance in missouri member rewards amex euro calculator exchange rate what is rental income taxed at currency iqd daymon john net worth list of world's richest countries ceo job descriptions and duties social conflict theory criminology ynab investment account best dental insurance for seniors good interview question to ask employer dual citizenship spain usa employer deadline w2 exchange rate calculator euros to pounds 13000 eur in usd defcredit.com.au cad exchange rate to usd better person synonym ultimate rewards partner airlines estimate tax return without w2 series e savings bond redemption iraqi dinar latest exempt on paycheck canadian to sterling exchange rate euros to pounds converter calculator translate usd to gbp dentalplans com reviews
Finding the total percentage gain or loss on a portfolio requires a few simple calculations, but first, you should understand ... Read Answer >>
Financial AdvisorInvestors who know the rules can turn their losing picks into tax savings. Here's how to deduct your stock losses.
TaxesFind out how taxes are applied to your investment returns and how you can reduce your capital gain tax burden.
RetirementThe safest Social Security calculators to use when figuring benefits are on the official website. The best are the ones that access your actual record.
TaxesLearn the proper procedure for deducting investment losses, and get some tips on how to strategically structure them to lower your income tax bill.
RetirementFind out how to analyze your Social Security benefits under different retirement scenarios using multifunctional online Social Security calculators.
RetirementHere are some calculations to determine if your net worth is what it should be at your age.
Managing WealthThe cost basis is the initial price paid in an exchange for a product or service.
InvestingIf you can't figure out why you're not achieving the returns you want, these behaviors might explain why.
The price that an investor pays for a security. This price is ...
A capital loss is the loss incurred when a capital asset that ...
A capital gains tax is a type of tax levied on capital gains ...
The gain or loss of a security in a particular period. The return ...
Capital gain is an increase in a capital asset's value that is ...
A gain or loss from a qualifying investment owned for longer ...