A:

Finding the total percentage gain or loss on a portfolio requires a few simple calculations. First, you should understand how percentage gains or losses are found on an individual security. To find the net gain or loss, subtract the purchase price from the current price and divide the difference by the purchase prices of the asset. For example, if you buy a stock today for $50 and tomorrow it is worth $52, your percentage gain is 4% ( ($52 - $50)/$50 ).

Finding the daily return on your portfolio requires a different approach. Because the stocks will usually have different purchase prices, a percentage gain in one security may not be equivalent to an equal percentage gain in another. Simply adding the individual percentage returns will not give an accurate measure of portfolio return. By adjusting the above method of finding a stock's return, you can find the percentage return of a portfolio. Instead of using the purchase price and current value of the stock, you will do your calculations based on the total value of your portfolio. For example, on June 1, your portfolio is valued at $14,500. After a week of market activity, your portfolio value increases to $15,225. Your percentage return on your portfolio for the week is 5% ( ($15,225 - $14,500)/$14,500 ).

For more information on evaluating your portfolio, read Equity Portfolio Management Mechanics.

RELATED FAQS
  1. How do you calculate the percentage gain or loss on an investment?

    To calculate the gain, take the price for which you sold the investment and subtract from it the price that you initially ... Read Answer >>
Related Articles
  1. Managing Wealth

    3 Steps to Assess Your Portfolio's Annual Performance

    Learn about three simple steps you can use to evaluate the annual performance of your investment portfolio, and why rate of return isn't enough.
  2. Investing

    Calculating The Means

    Learn more about the different ways you can calculate your portfolio's average return.
  3. Financial Advisor

    The Workings Of Equity Portfolio Management

    Achieve analytical efficiency by applying your evaluation to a key set of stocks.
  4. Investing

    Rebalance Your Portfolio to Stay on Track

    Like a tune-up for a car, this re-alignment should minimize trouble down the road.
  5. Investing

    Introduction To Value Investing

    Find out what value investing is and how you can put it to work for your investment portfolio.
  6. Managing Wealth

    Is Your Portfolio Overweight?

    As time passes, in order to remain profitable, investors need to put certain parts of their portfolio on a diet.
  7. Financial Advisor

    Top Tips for Deducting Stock Losses

    Investors who know the rules can turn their losing picks into tax savings. Here's how to deduct your stock losses.
  8. Financial Advisor

    4 Steps to Building a Profitable Portfolio

    This is a step-by-step approach to determining, achieving and maintaining optimal asset allocation.
  9. Investing

    Top Uses For Bonds

    Find out what bonds can do for your investment portfolio.
RELATED TERMS
  1. Estimated Long-Term Return

    A unit investment trust's estimated return over the life of the ...
  2. Absolute Percentage Growth

    An increase in the value of an asset or account expressed in ...
  3. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  4. Annual Return

    The return an investment provides over a period of time, expressed ...
  5. Yearly Rate Of Return Method

    More commonly referred to as annual percentage rate. It is the ...
  6. Average Return

    The simple mathematical average of a series of returns generated ...
Hot Definitions
  1. Investing

    The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.
  2. Stagflation

    A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, ...
  3. Notional Value

    The total value of a leveraged position's assets. This term is commonly used in the options, futures and currency markets ...
  4. Interest Expense

    The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the ...
Trading Center