Can you help me with a simple Math Problem?

Can you please help me with a simple Math Problem ???

You bought 100 shares XYZ company at $10 dollars each. So you invested (100 x 10 ) $1000

6 months later the stock splits 2:1

That gives you 200 shares at 5 dollars a share.

six months after that the stock price is up to 10 dollars a share. So that gives you 200 shares x 10 dollars = $2000 total value

So now you cash out. You sell everything. (200 shares x 10 dollars = $2000). So you get back $2000 cash

So is your Return on Investment equal to: is 100%??? (even though the stock split???)

I'm just wondering how the stock split might impact your ROI ??? or does it at all really??? From what I'm seeing it doesn't??? But I don't really know for sure as I don't know stocks that well. If you know about this can you explain how the stock split factors into calculating your ROI when you sell out??? (if it does that is). Thanks.

a reply to: lavatrance

If you're investing a total of $1000, and you come out with $2000, that should be a 200% return on investment.

If you made all your money back and broke even, that would be 100% return on investment

a reply to: lavatrance

I would just look at your starting amount invested, and how much you walked away with. If all of the math is correct with the stock split (and any other events that take place in between point A and point Z), then as long as you have the correct starting and ending amounts it should be pretty straightforward. Don't let those other details make you question yourself. You might be overcomplicating it

If you actually only have $2000 invested in this stock...don't sell if the shares are showing promise. Your money will keep growing.

originally posted by: FamCore
a reply to: lavatrance

If you're investing a total of $1000, and you come out with $2000, that should be a 200% return on investment.

If you made all your money back and broke even, that would be 100% return on investment

You forgot to subtract the initial investment.

ROI is calculated by subtracting the investment ($1000) from the value at the return-point ($2000) and divide the result ($1000) by the investment ($1000).

($2000 - $1000) / $1000 = 100%

Stock splits benifit the corporation not the stock holder. They split stocks because more people will buy the stock at $5 a share rather than $10. The more stocks available adds to the liquidity.

Your ROI is how much the stock price increases over time. In your scenario you doubled your money at 200%.

Edit: forgot to subtract initial investment. That was money you already had so it is not a return. You did get 100%.

To be honest I'd rather live in a van in the woods by my bunker than get involved in the stock market..

a reply to: misscurious

Why?

originally posted by: Atsbhct
a reply to: misscurious

Why?

I think it is a reference to the op's previous posts.

a reply to: Misterlondon

Hahahahahahaha. Maybe I should have a coffee.

a reply to: DupontDeux

Dang, I even googled it to make sure I wasn't jumping the gun. Apparently I should've further investigated the source - thanks for pointing that out.

www.google.com... " ROI forumla"

Net Profit / Total Investment * 100

a reply to: lavatrance

You got a hundred percent return on your investment. I think thats how they say it.

At a casino they'd say you doubled your money.

a reply to: misscurious

no doubt ha ha

okay so it was sort of how I suspected it was. Okay that answers my question.

Do you think a novice can make money in stocks or is it basically just legalized gambling? I get the impression it is just legalized gambling. You seem to have a far better odds going to the casino that you would in the market.

a reply to: lavatrance

It's legalized gambling if you throw a dart to pick a stock. If you do some research at a novice level, it's calculated risk. If you're more advanced, its more calculated/informed.

With any degree of research, I'd say it's less "gambling" and more "skill" than even poker, and the "house" (brokerage) takes a much smaller % cut than a casino.

a reply to: lavatrance

If you are going to play, play the long game imo.

Buy from established companies, that have a history of growth.

Day trading is crazy, and you are competing with computers that front run your moves.

They will buy or sell before you and buy and sell to you.

It is a lot of fun, if you have self control and disposable income.

The biggest problem I had with day trading was brokerage fees and high taxes, it makes it kind of moot.

a reply to: lavatrance

I've been investing since I was 17, but i've also been saving like mad since I was 17. I agree with other members, you have to go long term. It's not a get rich quick scheme. Things that sound too good to be true more than likely are.