Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Nope. Proceeds were $102 as I said too many times to count. I never said 1.01 shares. That's the narrative you dreamed up to prove yourself right. I said "total position worth $102". I started with $100 and finished with $102. In your world I made 3%. You must be a blast at parties.
100 to 102 is only 2% without counting the dividend you got being reinvested or received . that is not total return on your investment . .you do know what the term total return means i hope ...
if you paid 100 , got a dollar dividend and sold for 102 you have a 3% total return . 1% dividend -2% capital appreciation .
your example says you got a dollar dividend . that makes a total return of 3% . fund and stock returns on sites like morningstar always include dividends in their calculations .
whether you decide to reinvest or not it is still going to be a 3% total return once a dividend is paid if you sell for 102 . .
suppose the stock cost you 100 and it paid a 1 dollar dividend and you ended up selling for the same 100, your total return would be 1% , not zero . you got 1% in dividends and no capital appreciation in this case .
or another way to look at it is you invested 100 , they gave you back a dollar so you now have 99 still tied up and you sold for 100. it is still a 1 dollar gain no mater how you want to look at it.
looks to me like like the confusion is you don't understand what the term total return means or you would not have said your total return is 2 dollars on your post below because it is 1 dollar in dividends and 2 dollars appreciation for a 3% total return . . .total return means all dividends ,appreciation and interest included ,which you clearly did not count below . total return is not calculated by realized vs unrealized . it is the total return on that investment . how or what you decide to sell is irrelevant
------------------------------------------------------------------------------------------------------------------------------------------------------------------
"
. .Originally Posted by 1insider View Post
I buy $100 worth of XYZ. They pay a $1 dividend which is automatically reinvested. My total position is worth $102 at the close yesterday. My account shows a $1 unrealized gain but my total return on my original $100 is $2.
Last edited by mathjak107; 03-22-2018 at 04:58 AM..
As a passive investor I often wonder how important knowing what my actual return is.
Have investments distributed in my desired asset allocation, once per year look at balances to figure out where to buy/sell to meet income needs and rebalance.
it is very difficult to know unless you really go to great lengths to calculate it .
we all add money at different times , swap funds , rebalance at different times , etc . some reinvest interest and dividends .
it gets even harder when you are spending down .and money is coming out .
i can easily see what the investments got but with spending down it makes little sense to do any extra work for no reason to come up with a personal rate of return .some brokerages may do it for you .
Nope. Proceeds were $102 as I said too many times to count. I never said 1.01 shares. That's the narrative you dreamed up to prove yourself right. I said "total position worth $102". I started with $100 and finished with $102. In your world I made 3%. You must be a blast at parties.
I don't know about you, but I give up. The guy can talk for eons about total return but can't grasp the concept of total position. To end it with someone's favorite smilie -
you can figure any way you like but it does not mean you are calculating correctly , TOTAL RETURN , THE WORDS USED BY INSIDER MEAN EXACTLY THAT! you guys want to make up your own definitions and then complain you can't tell what your actual returns are feel free . the financial world has set definitions and meanings when it comes to tracking total return , not the pieces you just want to count .
Total Return www.investopedia.com/terms/t/totalreturn.asp
Total return, when measuring performance, is the actual rate of return of an investment or a pool of investments over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realized over a given period of time.
. .Originally Posted by 1insider View Post
I buy $100 worth of XYZ. They pay a $1 dividend which is automatically reinvested. My total position is worth $102 at the close yesterday. My account shows a $1 unrealized gain but my TOTAL RETURN on my original $100 is $2.
Last edited by mathjak107; 03-22-2018 at 07:48 AM..
Some investment accounts like Schwab's calculates the total return for you. It displays total account value changes and the total return percentages with comparisons to market ... I think the OP is saying that total return calculation is not so simple.
it is not simple if you want your personal total return . but the argument here is total return includes dividends , there is nothing to argue , or you are not talking about total return .
Nope. Proceeds were $102 as I said too many times to count. I never said 1.01 shares. That's the narrative you dreamed up to prove yourself right. I said "total position worth $102". I started with $100 and finished with $102. In your world I made 3%. You must be a blast at parties.
Let me simplify.
Beginning Balance (Cost): $100
Add Returns:
$1 Dividend
$2 Capital Gain (2% growth from $100 to $102)
Total Returns: $3
Closing Balance: $103
RoI: Total Returns/Cost or $3/$100 = 3%
Alternately, if you are saying your Total Position is your Closing Balance at $102, then the growth may only be 1% instead of 2%. So the calculation is:
Beginning Balance (Cost): $100
Add Returns:
$1 Dividend
$1 Capital Gain (1% growth from $100 to $101)
Total Returns: $2
100 to 102 is only 2% without counting the dividend you got being reinvested or received . that is not total return on your investment . .you do know what the term total return means i hope ...
if you paid 100 , got a dollar dividend and sold for 102 you have a 3% total return . 1% dividend -2% capital appreciation .
your example says you got a dollar dividend . that makes a total return of 3% . fund and stock returns on sites like morningstar always include dividends in their calculations .
whether you decide to reinvest or not it is still going to be a 3% total return once a dividend is paid if you sell for 102 . .
suppose the stock cost you 100 and it paid a 1 dollar dividend and you ended up selling for the same 100, your total return would be 1% , not zero . you got 1% in dividends and no capital appreciation in this case .
or another way to look at it is you invested 100 , they gave you back a dollar so you now have 99 still tied up and you sold for 100. it is still a 1 dollar gain no mater how you want to look at it.
looks to me like like the confusion is you don't understand what the term total return means or you would not have said your total return is 2 dollars on your post below because it is 1 dollar in dividends and 2 dollars appreciation for a 3% total return . . .total return means all dividends ,appreciation and interest included ,which you clearly did not count below . total return is not calculated by realized vs unrealized . it is the total return on that investment . how or what you decide to sell is irrelevant
------------------------------------------------------------------------------------------------------------------------------------------------------------------
"
. .Originally Posted by 1insider View Post
I buy $100 worth of XYZ. They pay a $1 dividend which is automatically reinvested. My total position is worth $102 at the close yesterday. My account shows a $1 unrealized gain but my total return on my original $100 is $2.
100 dollars invested pays a one dollar dividend ,,, you have 99 dollars in value left for markets to compound on at the open after it goes ex div so your amount invested is automatically reduced by the payout .and 1 dollar in pocket .
so far total investment value is 100 bucks ....,,, so far zero total return .... only now you have 99 dollars being acted on by markets and one dollar for reinvesting ..
so you reinvest the dollar , you have the same 100 dollars you had pre ex div working for you , only now you start out with more shares equaling the same 100 you had ... ... zero total return. but market action is on 100 dollars going forward .
if it never went ex div and paid out you have the same 100 bucks compounding for you by markets
where is 102 coming from ?
as .long as you reinvest the dollar the total return is just what it would be had the stock never gone ex div in the first place ..
so 100 in the investment gives you 99 dollars left compounding and 1 dollar in pocket...if market action doubles your value you have 198 invested and 1 dollar in pocket or 199 dollars .
if you renivest you have 100 bucks doubling to 200 dollars .
if the stock didn' t go ex div and payout and was still valued at 100 then markets doubling give you the same 200 balance in both cases...compounding is always the dollars invested x the percentage gain or loss .. number of shares that make things up is irrelevant.....
Last edited by mathjak107; 05-29-2020 at 09:07 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
