LEARN ABOUT AVOIDING MAKING MISTAKES IN STOCK MA RKETS. 1. ADDING PERCENTAGES Lets assume that 1st year you loose 50%. And 2nd year you make plus 50%. At the end of the 2nd year are your investment the same or less. At the end of the 2nd year you will have 75% of your investment. For example 1st year you invested $1000. At the end of the 1st year you loose 50 %. ---- $500 At the end of the 2nd year you gain 50% ---- $ 250 At the end of the 2nd year you have $ 750. So you lost $ 250. If you gain 100% at the end of the 2nd year, you will retreive your initial capital. This is the performence of your portpolio over the last 4 years. Year 1 : -10 Year 2 : - 45 Year 3 : + 20 Year 4 : + 35 Year 5 : ??? By how much you need to perform in year 5 in order to retreive your initial capital. Yea
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