In stock investment, the rate of return is an important reference index, which can help investors to evaluate the return of the investment. So, how should the rate of return in stocks be calculated?

I. simple rate of return

Simple rate of return is the most basic calculation method, which refers to the ratio of investment income to investment principal. The specific calculation formula is as follows:

Simple rate of return = (selling price-buying price) / buying price

For example, if you buyBlizzardcryptogame1000 yuan of stock, and finally sold at a price of 1200 yuan, then the rate of return is (1200-1000) / 1000 = 20%.

2. Annualized rate of return

The annualized rate of return takes into account the investment period, which is more suitable for the evaluation of long-term investment. The calculation formula is as follows:

Annualized rate of return = [(final value / initial investment) ^ (1 / investment life)-1] * 100%

For example, if you invest 10000 yuan and become 15000 yuan three years later, the annualized rate of return is [(15000 / 10000) ^ (1 / 3)-1] * 100% ≈ 14Blizzardcryptogame.49%.

Third, Sharp ratio

The Sharp ratio is an indicator of risk-adjusted returns, which reflects how much excess returns can be brought for each unit of risk. The calculation formula is as follows:

Sharp ratio = (expected return of the portfolio-risk-free rate) / Standard deviation of the portfolio

The risk-free interest rate usually refers to the interest rate of treasury bonds, and the standard deviation is an index to measure the volatility of portfolio returns. The higher the Sharpe ratio, the higher the investment efficiency and the better the risk-adjusted return.

IV. Dividend yield

The dividend yield refers to the ratio of the dividend paid by the company to the stock price, which is an index to measure the dividend income of the stock. The calculation formula is as follows:

Dividend yield = dividend per share / stock price

For example, if a company pays a dividend of 0.5 yuan per share and the stock price is 10 yuan, then the dividend yield is 0.5 / 10 = 5%.

V. Summary

When investing in stocks, the rate of return is an important index to evaluate the investment return, including simple rate of return, annualized rate of return, Sharp ratio and dividend yield. Different yield calculation methods are suitable for different investment scenarios, and investors need to choose according to their own investment objectives and risk preferences.