Infokekinian.com – On this occasion I will share information on the meaning, types, how to calculate stock returns. So, keep reading this article until it's finished.
Every time you read an article about investing, of course you often hear the term 'high risk, high return', right? However, do you know what return is?
Financial return or what is often known as return is the value that increases or decreases as a result of investment over a certain period of time.
So what is meant by high risk high return is the higher the investment risk, the higher the return obtained.
Returns can be expressed in the amount of money earned during a certain investment period, or in the form of a percentage.
This can also be achieved in the form of net profit after administration costs, inflation and taxes.
More simply, return is the change in the price of an asset, investment, and project over a period of time, which can be expressed as a difference in price or as a percentage.
If the return calculation results are positive, then the investment made is profitable. Conversely, if the estimation results are negative, it means that the investment made is a loss.
How to Calculate Stock Returns
The calculation is as follows:
For example, you buy shares of PT. XYZ worth 175 rupiah per unit. The following year, the shares sold for 225 rupiah per share. Then the return obtained is 28.5 percent.
(225-175): 175 x 100% = 28.5 %.
Stock returns have two main components. The first component is the yield, which is the return component which reflects the cash flow or income earned from the investment within a certain period of time. Yield is just zero and positive numbers.
The second component is capital gain or loss. This component can be interpreted as an increase or decrease in the price of investors' profits and losses. Capital gain can be negative, zero or positive.
There are a number of factors that influence stock returns, namely macro factors which consist of macroeconomic factors and noneconomic macro factors.
Macroeconomic factors include inflation, interest rates, foreign exchange rates, economic growth rates, fuel prices on international markets and regional stock price indices.
Meanwhile, non-economic macro factors include political events, social events and international political events. In addition, there are microeconomic factors, namely factors from within the company.
In general, stock returns are divided into two. Including the following:
1. Return realization
Realized return is a return that is calculated based on historical data. Historical data itself is a summary of the stock price developments of certain issuers listed and traded on the Indonesia Stock Exchange (IDX).
Investors can also get historical stock data by selecting the issuer's name and then entering the number of days to understand the stock's trend.
2. Return expectations
Expected return is a return that still exists in the form of the investor's own expectations or forecasts. Of course, this expected return is still unlikely to occur.
That's a little introduction about stock returns and how to calculate them.
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