Afroblk wrote:youcan'tstopusnow wrote:mwenza wrote:Hii hesabu inanikumbusha ile ya bodmas tulifanya hapa Juzi...... Kweli hesabu sio rahisi!....How do you talk of overall percentage gains without factoring in quantities held in various counters? Na transaction commissions nayo?
Yep. He should consider the quantities...
For my computation and margin gains I do not include quantities for obvious reasons. I buy my stocks as chunks so always have one buying price. the basic calculations are not affected whether you trade 100 or 100,000 stocks.
I also do not factor commissions, they are just change and all they do is complicate the computations. I also
do not include dividends as I do not keep track of them, but I see the account doing well.
I base my calculations solely on value of the current stock compared to the purchase value.
Commissions at nse are about 2.3%. Everytime you jump in and out of a stock, you lose close to 5%! Of the investment.
Dividends are primary return from stocks and their reinvestment the true source of wealth in stocks. Capital gains are just the sweetener. In a bear market you can even get 10% return from div.
Current prices give you paper returns, actualised when you sell, hence importance of considering dividends and commissions to calculate the real return.
Life is short. Live passionately.