How Do You Calculate Annual Percentage Return On Investment?
An investor wants to know a stock’s annual rate of return to help him gauge how well the security is performing. The annual percentage return on investment is the most basic of measures for securities in a portfolio. An investor can use the calculation to quickly compare the performance of varied investments and give her a starting point to evaluate possible portfolio adjustments. Calculate what your investment was worth at the beginning of the first day of the year. If you owned 1,000 shares of Company A stock on Jan. 1, 2009, that closed at $10 on Dec. 31, 2008, the investment started the year valued at $10,000. Calculate the capital gain of your investment on the end of the last day of the year. If the stock closed at $12 on Dec. 31, 2009, your 1,000 shares are worth $12,000, for a capital gain of $12,000-$10,000, or $2,000. Add the value of any dividends you received on the investment at any point during the year. If your stock paid an annual dividend in October of 10 cents per sha
