Loading the player...
A:

Calculating the percentage change of your investment is quite easy. All it takes is a little bookkeeping and either a simple calculator or a pad of paper for doing the long division. Here is what you need to do:

Take amount that you have gained on the investment and divide it by the amount invested. To calculate the gain, take the price for which you sold the investment and subtract from it the price that you initially paid for it. Now that you have your gain, divide the gain by the original amount of the investment. Finally, multiply your answer by 100 to get the percentage change in your investment.

If the percentage is negative, resulting from the market value being lower than the book value, you have lost on your investment. If the percentage is positive, resulting from market value being greater than book value, you have gained on your investment.

Here is what the formula looks like:

(Price Sold - Purchase Price)/(Purchase Price)

If you haven't sold the investment, you can use the current market price in the place of the price sold.

This basic formula is used every day to find out exactly how many percentage points indexes, stocks, interest rates, and so on have changed over a given period of time. For example, if the Dow Jones Industrial Average opens at 9,000 and closes at 9,300 today, the formula would show that the percentage change over the day was 3.33% [(9,300 – 9,000) / (9,000)].

However, investing does not come without costs and this should be reflected in the calculation of your percent gain or loss. The above is an illustration of the calculation without costs, such as commissions and taxing. To incorporate costs, reduce the gain (market price - price purchased) by the costs of investing. By incorporating these costs you will get a more accurate representation of your gain or loss. Also, if your investment paid out any income, such as a dividend, you will need to add this amount to the gain amount.

Here is a more detailed way to calculate gain or loss:

[(Amount Sold - Amount Paid) + Income Gain - Costs]/Amount Paid

Learn how to figure out your cost basis on an investment by reading How do I figure out my cost basis on a stock investment?

RELATED FAQS
  1. How do I calculate the percentage gain or loss for my portfolio when all of the stocks ...

    Finding the total percentage gain or loss on a portfolio requires a few simple calculations. First, you should understand ... Read Answer >>
  2. How do I figure out my cost basis on a stock investment?

    The cost basis of any investment is the original value of an asset adjusted for stock splits, dividends and capital distributions. ... Read Answer >>
  3. How does a person gain from an investment?

    There are two main ways in which a person gains from an investment. The first is by capital gains, the difference between ... Read Answer >>
  4. How do I calculate my gains and/or losses when I sell a stock?

    To begin, you need to know your cost basis, or the price you paid for the stock. If you did not record this information, ... Read Answer >>
  5. How do you calculate the cost basis for a mutual fund over an extended time period?

    Investors must pay taxes on any investment gains they realize. Subsequently, any capital gain realized by an investor over ... Read Answer >>
  6. Why should I invest?

    One of the most compelling reasons for you to invest is the prospect of not having to work your entire life! Bottom line, ... Read Answer >>
Related Articles
  1. Fundamental Analysis

    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. Investing Basics

    Investing With A Purpose

    Your reasons for investing are bound to change as you go through the ups and downs of life. Setting goals is the first step in determining which investment vehicles are right for you.
  3. Investing

    Ten Worst Mistakes Beginner Investors Make

    Here are the ten worst mistakes beginning investors make.
  4. Retirement

    Is Investing $25 A Month Worth It?

    Find out how small investments can add up over time and how to avoid the fees that can eat tiny returns.
  5. Investing Basics

    5 Questions First Time Investors Should Ask in 2016

    Learn five of the most important questions you need to ask if you are a new investor planning on starting an investment program in 2016.
  6. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  7. Taxes

    Capital Gains Tax 101

    Find out how taxes are applied to your investment returns and how you can reduce your tax burden.
  8. Retirement

    11 Social Security Calculators Worth Your Time

    The safest Social Security calculators to use when figuring benefits are on the official website. The best are the ones that access your actual record.
  9. Investing Basics

    The Seasons Of An Investor's Life

    From a tentative spring to a comfortable winter, learn how to weather the phases of your investing journey.
  10. Investing

    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. Rate Of Return

    The gain or loss on an investment over a specified period, expressed ...
  2. Paper Profit (Paper Loss)

    Unrealized capital gain (or capital loss) in an investment. It ...
  3. Long-Term Capital Gain Or Loss

    A gain or loss from a qualifying investment owned for longer ...
  4. Investing

    The act of committing money or capital to an endeavor with the ...
  5. Recognized Gain

    When an investment or asset is sold for an amount that is greater ...
  6. Yearly Rate Of Return Method

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

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center