How our investments performed (2024)

FAQs

How do you explain investment performance? ›

Investment performance is the return on an investment portfolio. The investment portfolio can contain a single asset or multiple assets. The investment performance is measured over a specific period of time and in a specific currency. Investors often distinguish different types of return.

Since you hold investments for different periods of time, the best way to compare their performance is by looking at their annualized percent return. In this example, your annualized return is 9.42 percent. Tip: Use FINRA's Fund Analyzer to find annual and total return for mutual funds and ETFs.

Relative performance — Comparing your return to the overall market is a better measure. If your total portfolio is up 20% for the year and the overall market is only up 15%, you have done very well. Or if your portfolio is down 10% and the overall market is down 15%, you have done well.

Investment is an asset acquired or money committed with a purpose to earn income in future. Investments are also made to benefit from future appreciation in the value of an asset. Investment is a purchase of goods which is future-oriented, aimed at earning income in the future or creating wealth in the future.

The key performance metrics and ratios for investment performance include Return on Investment (ROI), Compound Annual Growth Rate (CAGR), Sharpe Ratio, Information Ratio, Jensen's Alpha, Sortino Ratio, and Treynor Ratio.

A company in good financial health will pay its bills on time and maintain good business credit. Analysis of financial performance metrics can be used to identify internal investment opportunities, like automating repetitive processes to increase productivity, and can help maintain positive cash flow.

“The best way to measure your investing success is not by whether you're beating the market but by whether you've put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” – Benjamin Graham.

Using benchmarks will give you a snapshot of your portfolio's performance relative to the market. Ideally, you want your returns to be close to, but (hopefully) exceeding, the relative benchmarks and exhibiting a level of volatility consistent or lower than those benchmarks.

How do you recognize a good investment? ›

Look for fairly-priced shares, high capital returns, competitive products or services, and a clear understanding of how the company makes money. By focusing on these signs, you can increase your chances of making successful investments that yield strong returns over time.

The returns in your portfolio are usually computed as subtracting the amount you invested from the total portfolio value. This number will then be divided by the total investment amount and multiplied by 100. This is how you were taught to compute returns on any type of investment to track your portfolio performance.

Investment decisions, sometimes referred to as capital budgeting decisions, involve determining where and how much capital should be allocated in order to generate maximum returns for the investors or shareholders.

Investment is the activity of investing money. He has made a $1 million investment in the company. The government is very open to foreign investment in the airline. Investment is the activity of investing money.

Key Takeaways

Have a plan, prioritize saving, and know the power of compounding. Understand risk, diversification, and asset allocation. Minimize investment costs. Learn classic strategies, be disciplined, and think like an owner or lender. Never invest in something you do not fully understand.

An investment is a plan to put money to work today to obtain a greater amount of money in the future. It is also the primary way people save for major purchases or retirement.

Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average.

Portfolio performance refers to evaluating the performance of an investor's investment portfolio. It is essentially a process of comparing a portfolio's return with the return earned on a benchmark portfolio (or one or more other portfolios or indices).

In summary, a good investment involves a blend of factors encompassing returns, risk management, liquidity, stability, alignment with goals, transparency, quality management, growth potential, cost-efficiency, ESG considerations, and adaptability to market changes.