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Re: lesgetrich post# 59445

Saturday, 05/09/2015 1:07:48 AM

Saturday, May 09, 2015 1:07:48 AM

Post# of 112681
Actually, the total return is actually only 50% for a stock that rises 100% on day 1 and then falls by 25% on day 2.

Example:

$1,000 base investment
+ $1,000 earned on day 1 after rising 100% ($1,000 * 100% == $1,000)
----------
$2,000 total at end of day 1
- $ 500 lost on day two after falling 25% ($2,000 * 25% == $500)
----------
$1,500 total at end of day 2

$1,500 total at end of investment
$1,000 total at beginning of investment
---------
$ 500 total cash earned over investment time period

($500 / $1,000) == 50% return on original investment