Negative Return

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Dictionary Says

Definition of 'Negative Return'

This occurs when a company or business has a financial loss or lackluster returns on an investment during a specific period of time. Some businesses report a negative return during their early years because of the amount of capital that initially goes into the business to get it off the ground. New businesses generally do not begin making a profit until after a few years of being established. 

Also referred to as negative return on equity.

Investopedia Says

Investopedia explains 'Negative Return'

A new business that has invested $500,000 into equipment, tools, repairs or any other operational expenses and is losing $50,000 annually will have negative return on capital of 10%. If the company is able to realize a return on equity in the near future, then the impact of this initial negative return can be overcome.

Investors in the company will be willing to stick around if they know that the company has the potential to quickly turn its negative return into a positive return and bring in high profits, sales or asset turnover. 

Stocks and other investments can also have a negative return.

Search results for

'Negative Return'

  • Can a bond have a negative yield?

    http://www.investopedia.com/ask/answers/06/negativeyieldbond.asp
    ... calculation will provide the bondholder with an accurate assessment of his or her
    return. The only way a bond's current yield could be negative, using this ...

  • Internal Rate Of Return: An Inside Look

    http://www.investopedia.com/articles/07/internal_rate_return.asp
    ... Subsequent cash flows (CF 2 , CF 3 , CF N) are negative $1050 (negative because
    it is being ... Figure 1: The formula for calculating internal rate of return (IRR). ...

  • Calculating Covariance For Stocks

    http://www.investopedia.com/articles/financial-theory/11/calculating-covariance.asp
    ... If the result was negative, then the two stocks would tend to have opposite returns;
    when one had a positive return, the other would have a negative return. ...

  • Bond Portfolios Made Easy

    http://www.investopedia.com/articles/bonds/08/bond-portfolio-made-easy.asp
    ... This is a disadvantage for bonds, as folks who favor stocks will quote that
    the current bond market yields a negative return. While ...

  • Gauge Portfolio Performance By Measuring Returns

    http://www.investopedia.com/articles/fundamental-analysis/08/performance-analytics-returns.asp
    ... in the data stream. The reverse would happen if a large negative return
    occurred early in the stream. For either outcome, using ...

  • Don't Bank On A Tax Refund - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0110/Dont-Bank-On-A-Tax-Refund.aspx
    ... government does not pay interest, so letting the government borrow your tax dollars
    interest-free for one year yields you a lower (or negative) return on your ...

  • How The Sharpe Ratio Can Oversimplify Risk

    http://www.investopedia.com/articles/07/SharpeRatio.asp
    ... of returns. Many hedge fund strategies produce small positive returns with
    the occasional large negative return. For instance, a ...

  • The Joys And Pains Of 3X Returns

    http://stocks.investopedia.com/stock-analysis/2009/The-Joys-And-Pains-Of-3X-Returns-FAS-FAZ-TYH0217.aspx
    ... True to form, the FAS ETF carried out its mission and posted a negative return in
    slight excess of 64% for year-to-date ended February 11, while the Russell ...

  • Glenn Murphy: Here's How You Fix The Gap

    http://stocks.investopedia.com/stock-analysis/2011/Glenn-Murphy-Heres-How-You-Fix-The-Gap-GPSKSSJCPVFCLIZ0624.aspx
    ... 15.8% for the S&P 500 and the index's return doesn't include dividends. $8.5
    billion is a lot to spend to produce a negative return. ...

  • The Bull Case For Goldman Sachs

    http://stocks.investopedia.com/stock-analysis/2011/The-Bull-Case-For-Goldman-Sachs-GS-JEF-RJF-JPM1216.aspx
    ... So far in 2011, the financial group is by far the worst performing sector
    and has posted a negative return of more than 21%. And ...

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