Re: Yield Precentages

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In Reply to: Yield Precentages posted by Larry Piekarski on January 03, 1999 at 18:07:49:

: I think there may be a problem with the yield precentage
: at the top of the graphs. The other day I bought a stock
: at 33 1/2 and it dropped during the day and closed at
: 33 even. The next day it posted a 1/4 point gain closing
: at 33 1/4. The graph showed a gain on the stock when I
: indeed had a loss.

: For example, buy 1 share of TEST on 1/1/98 at 20. Manually
: enter a closing price of 10 on 1/1/98. Manually enter
: a closing price of 15 on 1/1/99. The graph shows a
: 50% gain (10 -> 15 over 1 year) when in reality I had
: a 25% loss (20 -> 15 over the same year). Is the gain
: calculation being calculated using the wrong numbers
: or am I interpreting something wrong?

Larry,
The problem you're having is with what FM uses as your starting value. In the case of your TEST example, if the starting date for the yield term includes the purchase, you will see a -25% yield, but if the starting date is after your purchase, you will see the +50% yield. For example, if you adjust your graphs starting date to 12/31/97 you will see the -25% yield value, as FM is including the purchase.

Let's assume you bought 100 shares:

Yield starting date of 12/31/97:
Starting value = $0
1 investment for $2000
Ending value is $1500
Looking at the ROI yield equation, this will come
out to -25%.

If you have the starting date at 1/1/98:
Starting value = $1000 ($10/share * 100 shares)
0 investments
Ending value of $1500
The ROI yield is reported correctly as +50%.

It boils down to whether or not the yield date
range is set such that the "bad" investment
is included, or if it just sets that as it's starting point. If all of this was more confusing than helpful, I understand, but the solution is to just change your graph starting date to an earlier date...

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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