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PraveenP

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PraveenP

Re: OLD NO.7 post# 70

Friday, 12/10/2010 4:38:39 PM

Friday, December 10, 2010 4:38:39 PM

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Hi Larry G,

To understand the example, think of it as a portfolio consisting of cash and one stock (AMZN). The "amount invested" column is the total amount that has been invested in the portfolio.

So, to get the return, we are dividing total value (stock value + cash) by the amount invested.

In 2005 and 2007, we could make the buys using only the cash pool. We didn't have to invest more money into the portfolio. So, the "amount invested" column didn't change, but the "cash pool" column decreased.

I hope that helps.

I'm sorry that it wasn't clearer.

Praveen

Praveen Puri
Author of "Stock Trading Riches"
The Stock Trading Riches System discussion board: http://investorshub.advfn.com/boards/board.aspx?board_id=19287

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