Calculate return: You can use this return formula to calculate your share performance
Calculate the annualized return
As mentioned at the beginning, the rate of return should make your investment (s) comparable. It is therefore advisable to normalize the return to the length of a calendar year. The stockbroker speaks of annualized return or Rents per annum, short: Render by
Back to our example above: If you have held your security, such as a fund or a share, for more than a calendar year and, for example, only sold it after 570 days, the annual return will be lower. The basis is now the formula for calculating the annualized return:
Annual return = (1 + total return) high (365 / holding period in days) – 1st
If we insert the return of 25 percent (in the formula as 0.25) from the above example, the result is:
(1 + 0.25) high (365/570) – 1
a result of 0.1536. That corresponds to a return of 15.36 percent per year. You have already standardized the annual return and made it comparable to your investment as a standardized measure of success.
Important: If your school days are a little further back, the operator ranking should be recalled at this point: First you perform the calculation within the brackets, then the exponent, i.e. the exponent, is used. Subtraction then follows in the third calculation step.