Market Return: Trading Start
Financial market trading is difficult for novices. Investors and traders must understand market return. This article covers trading and market return.
Back to market?
Market return is financial investment profit or loss. Gain or loss on original investment. Market return is usually %.
Market return tracks investment or index performance. Positive market returns imply lucrative investments, whereas negative returns indicate losses.
Calculating Market Return
Calculating market return requires beginning and ending investments. Formula for market return:
Final Value – Initial Investment * 100 = Market Return.
Market return on a $10,000 stock that rose to $12,000:
(12,000 – 10,000) / 10,000 * 100 = 20%
This investment’s 20% market return means 20% profit.
Market returns matter
Market return helps traders and investors assess investments. Market returns of many assets or indexes may help traders pick portfolio composition and investment approaches.
A person or fund’s market return compared to an index. Investors who return 12% beat the market by 10%.
Market return helps traders spot financial market patterns using historical data. Researching market return patterns may help traders benefit from changes.