Average Rate of Return vs Real Return

in #money7 years ago

Know what you're looking at. You can have a positive average rate of return and still loose money.

Day 1 stock is $100
Day 2 stock is $50...50% drop
Day 3 Stock is $75...50% gain

Average return is 25% but you're down $25.00

That's the difference between average return and real return.

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