investing

6 financial formulas to help you succeed

Formula No. 5: Calculate your gains (or losses)
(Market price – Purchase price) ÷ Purchase price = Percentage increase

You're invested in a blue-chip stock, and you'd like to know how much, in percentage terms, your investment has increased so that you can finally get your brother-in-law to quit yapping about the killer returns he's going to realize on his ill-advised investment in desert-front property in Arizona.

Using the formula, say you bought the blue-chip stock at $60, and now it's trading for $100:

($100 - $60) ÷ $60 = 67 percent gain

You can prove that you're one smart cookie.

If, on the other hand, you listened to your brother-in-law's sales spiel about the property in Arizona, your investment has gone down in value. By how much? You just switch up the formula a little:

(Purchase price – Market price) ÷ Purchase price = Percentage decrease

Suppose you bought shares in an Arizona-focused real estate investment trust at $200 and it's now selling for $100:

($200 - $100) ÷ $200 = 50 percent loss

Sorry about your loss!

advertisement

          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

Start retirement savings at 24?

Dear Dr. Don, At age 24, I recently started a job working for a corporation. I'm interested in individual retirement accounts. I'd like to look at investing in stocks and bonds and learn more about choosing a 401(k) plan.... Read more

advertisement

Blog

Jean Chatzky

Jean Chatzky: Bad month for the market?

How should you react to headlines that tell you a crash is imminent?  ... Read more

Partner Center
advertisement

Connect with us