What is ROI in stock investments?
ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money invested. In stock investments, it includes both capital gains (or losses) and dividend income minus any fees or commissions.
How are capital gains calculated in stock investments?
Capital gains are calculated by subtracting the purchase price from the selling price of the shares. For example, if you bought 100 shares at ₹100 each and sold them at ₹120 each, your capital gain would be (₹120 - ₹100) × 100 = ₹2,000.
What is the difference between dividend yield and total return?
Dividend yield measures the annual dividend income as a percentage of the stock price. Total return includes both dividend income and capital gains/losses. Total return provides a more comprehensive measure of an investment's performance.
How does the Shares Return Calculator account for fees?
The calculator includes brokerage fees and other transaction costs in the total investment cost. These fees reduce your net profit and are factored into the ROI calculation to give you a more accurate picture of your investment performance.
What is annualized return and why is it important?
Annualized return is the geometric average amount of money earned by an investment each year over a given time period. It's important because it allows you to compare investments with different holding periods on an equal basis.
How often should I calculate my stock returns?
It's good practice to calculate your stock returns periodically, especially after significant price movements or dividend payments. Regular monitoring helps you make informed decisions about holding, buying, or selling your investments.