How can you calculate possible return from investing in shares on the Stock Market?

Question

HI

How can i calculate possible returns from investing in stocks on the Stock market. like i know that you cant predict the future but if a stock was increasing about overall by 8% every 6months or so i could then say how much i could make after a few years of holding the stock with some simple mathmatics.

but is ther any other way on predicting or using calcualations to predict possible returns for investing in a stock for say 10 years.

Thankyou

Answer 1

PV= FV/(1-i)^n

PV=Present Value

FV=Future Value

i=interest rate

n=number of periods

I just then plug these numbers into my HP 12 c Calculator (you can use excel or a cheaper calculator if you like)

For your example if you invested 100 dollars in 10 years you would have

PV= -100

i=8

n=20

FV=466.10

Realize that your annual interest rate is higher that 8%

But that is how you would calculate returns

Answer 2

When you go in Bank to deposit you money....

for 6 months or 1yr.... you dont ask your banker, how much interest i got today....

If this kind of mind set you follow in stock market.. surely 1 year later you get maximum 30 to 40% returns...

But risk also is major.

When you purchase shares at bottom... and sell on top....

You get right path to your money.

Most IMPORTANT thing in stock market is PATIENCE..

All The Best!!!