Tuesday, November 6, 2012

DIFFERENCE BETWEEN ABSOLUTE RETURN AND ANNUALIZED RETURN

Sir, I am Manish Parekh, please remember our last discussion on profit booking formula. I just want to know which type of 11% return you have quoted? Absolute or annual? I also want to know the difference between two. If you can help me, please guide. ask by manish parekh 
1. Manish ji i give this formula in my mutual fund blog . for new readers i give a link of this article http://mutualfundgenius.blogspot.in/2010/08/sharegenius-formula-of-book-profit-in.html 

and latter we discuss it on this blog..here is the link of our past discussion 
http://sharegenius.blogspot.in/2012/05/how-to-book-profit-in-mutual-funds.html 

2. OK , now i tell you about difference of absolute return and annual return. 
3. The absolute return also known as simply return.this is a measure of the gain or loss on an investment portfolio.absolute return is expressed as a percentage of invested capital. for example i invest 30,000 in arvind ltd at 2009 and now my portfolio value is 150000 so my absolute or simple return is 120000 rupee in percentage term it is 400% of basic investment amount 30,000. 
4.I get this 400 % gain in 3 years so if my basic investment of 30000 grow 71% each year and we compounded (add)profit every year in basic amount than in 3 year it will be grow near 400% so my annualized return is 71 % 
5. so in my formula of profit booking in mutual fund SIP , i quoted 11% absolute return or simple return.

Matched Content

My Youtube Channel

Blog Archive

हिन्दी वेबपेज आफ महेश कौशिक डाट कोम

Google+ Followers