Trying to compare two investment scenarios

How can I compare two investments?

How do I compare investment opportunities?

1. Payback Period.
2. The time value of money.
3. Net Present Value.
4. Internal Rate of Return.
5. Equivalent Annual Annuity.

How do you calculate investment?

You may calculate the return on investment using the formula: ROI = Net Profit / Cost of the investment * 100 If you are an investor, the ROI shows you the profitability of your investments. If you invest your money in mutual funds, the return on investment shows you the gain from your mutual fund schemes.

What is a good rate of return on investments?

about 7% per year

A good return on investment is generally considered to be about 7% per year. This is the barometer that investors often use based off the historical average return of the S&P 500 after adjusting for inflation.

How do you improve return on investment?

Increase Revenues



One way to increase your return on investments is to generate more sales and revenues or raise your prices. If you can increase sales and revenues without increasing your costs, or only increase your costs enough to still provide a net gain in profits, you’ve improved your return.

When there are two mutual funds How will you compare and take investment decisions?

One of the most common ways of comparing mutual funds is by comparing the Net Asset Value of two funds. Usually, the NAV at the beginning and NAV at the end of period of time is taken into consideration by investors.

What are the 2 basic types of return on an investment?

Capital appreciation (the stock price rising in value), and dividends are the two ways you can earn a return as a shareholder.

How do you measure investment performance?

Since you hold investments for different periods of time, the best way to compare their performance is by looking at their annualized percent return. For example, you had a $620 total return on a $2,000 investment over three years. So, your total return is 31 percent. Your annualized return is 9.42 percent.

How do you calculate the value of an investment over time?

If you deposit $100, at the end of one year with the interest rate of 5% and if the number of years is 1 year, then you can read the formula as follows: “The future value (FV) at the end of one year equals the present value ($100) plus the value of the interest at the specified interest rate (5% of $100 or $5).”

How do I calculate an investment return in Excel?

To calculate the ROI, below is the formula.

1. ROI = Total Return – Initial Investment.
2. ROI % = Total Return – Initial Investment / Initial Investment * 100.
3. Annualized ROI = [(Selling Value / Investment Value) ^ (1 / Number of Years)] – 1.

What is the best way to compare mutual funds?

The Right Way to Compare Equity Mutual Funds

1. a. Compare Long-Term Performance. …
2. b. Don’t only Look at Returns. …
3. c. Compare Downside Protection of the Funds. …
4. d. Compare Fund Performance to the Right Benchmark i.e. Category Average Returns. …
5. e. Look at each Risk Measure in relation to others. …
6. f.

How should one compare the performance of two schemes?

While comparing two schemes, it is recommended that one compares the annualized returns for the same time period. For instance, if you look at 3 -year returns of a particular fund, then you need to compare it with the 3 – year returns of another fund, and not the 5 – year returns.

How do you compare expected returns?

Understanding Expected Return



For example, if an investment has a 50% chance of gaining 20% and a 50% chance of losing 10%, the expected return would be 5% = (50% x 20% + 50% x -10% = 5%).

How do you know if an investment is good?

How to Tell If an Investment Is Good or Bad

1. Review a stock’s historical price changes over the past 12 months to get a sense of overall performance. …
2. Calculate the stock’s price-to-earnings ratio. …
3. Compare the results with the average P/E ratio — approximately 15 — for companies that trade in the S&P 500 Index.

Which one of the following should be used to compare the overall performance of three different investments?

total percentage return. Which one of the following should be used to compare the overall performance of three different investments? market capitalization.

How do you see what investors are buying?

How to find where the Big Players are investing in the market?

1. Check the block/bulk deals list.
2. Check the shareholding pattern of the companies.
3. Track Portfolio using financial aggregator websites.

How do you analyze stocks for beginners?

How to do Fundamental Analysis of Stocks:

1. Understand the company. It is very important that you understand the company in which you intend to invest. …
2. Study the financial reports of the company. …
3. Check the debt. …
4. Find the company’s competitors. …
5. Analyse the future prospects. …
6. Review all the aspects time to time.

How do I clone investors?

Quote: Up you know giving yourself an immediate advantage over the average. Market participant. And in 2008. There was actually a study that came out around this exact topic of cloning. The great investors.