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 are my total returns calculated?

    My financial planner says my equity portfolio is up year to date after the fee (1.5%) 5 months into the year. Bonds are up ... Read Answer >>
  2. How do you calculate the percentage gain or loss on an investment?

    Calculating the percentage change of your investment is quite easy. All it takes is a little bookkeeping and either a simple ... Read Answer >>
  3. What kind of stocks should I buy (Ex. Oil, Gold, Consumer, Bio, or Tech)?

    How many stocks should be in a buy and hold strategy? At what percentage gain should I start taking real prof... Read Answer >>
  4. How are capital gains calculated when using an online brokerage account?

    Are capital gains calculated annually or on every trade? How can selling a stock at a loss save me money on taxes? Also, ... Read Answer >>
  5. How do I calculate my portfolio's investment returns and performance?

    Learn the basic principles underlying the data and calculations used to perform personal rates of return on investment portfolios. Read Answer >>
  6. How do I calculate my year-to-date (YTD) return on my portfolio?

    Find out how to calculate the year-to-date return of a portfolio, including examples of YTD return calculations with and ... Read Answer >>
Related Articles
  1. Investing

    Calculating The Gain Or Loss On An Investment

    Calculating the percentage of change in an investment is easy. Take the amount the investment gains and divide it by the amount invested.
  2. 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.
  3. Managing Wealth

    The Workings Of Equity Portfolio Management

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

    Calculating The Means

    Learn more about the different ways you can calculate your portfolio's average return.
  5. Managing Wealth

    Rebalance Your Portfolio To Stay On Track

    Like a tune-up for a car, this re-alignment should minimize trouble down the road.
  6. Managing Wealth

    Achieving Optimal Asset Allocation

    Minimizing risk while maximizing return with the right mix of securities is the key to achieving your optimal asset allocation.
  7. Investing

    Is Your Portfolio Overweight?

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

    5 Popular Portfolio Types

    Learning how to build these portfolios will increase your investing confidence and give you financial control.
  9. ETFs & Mutual Funds

    4 Steps To Building A Profitable Portfolio

    This is a step-by-step approach to determining, achieving and maintaining optimal asset allocation.
  10. 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.
RELATED TERMS
  1. Portfolio Return

    The monetary return experienced by a holder of a portfolio. Portfolio ...
  2. Estimated Long-Term Return

    A unit investment trust's estimated return over the life of the ...
  3. Return

    The gain or loss of a security in a particular period. The return ...
  4. Trading Effect

    A measure of performance that examines the difference in returns ...
  5. Absolute Percentage Growth

    An increase in the value of an asset or account expressed in ...
  6. Modern Portfolio Theory - MPT

    A theory on how risk-averse investors can construct portfolios ...
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center