How do I find the estimated return of a stock?

Question

I'm making a mock portfolio that includes stocks and bonds. I want to calculate the blended return of my portfolio. I know the return rates for the bonds, but how do I figure out the return for stock? I have no idea if the stock will even go up... My stocks include XMSR, MMM, and VZ for example. Where can I find their return rates?

Answer 1

ETrade is pretty good.

Answer 2

The easiest way to do that is to calculate percentage change in price plus any dividends. Or if you use data from Yahoo from example and want daily return of any stock, you devide day's adjusted closing price (in yahoo prices are already adjusted for dividens and stock-splits) devided pay previous day's closing price minus 1. Then once you calculate the daily return for each stock and bond, you can compute the return of your portfolio as a weighted average of each individual asset return. That is sum of products of an asset return and its weight in the portfolio (market value of the asset at the end of the day (i.e. number of shares or bonds times closing price) devided by total market value of your portfolio)

Answer 3

One way to figure out the expected return on a stock is to use the Capital Asset Pricing Model.  You can get the beta from Yahoo finane and the risk free rate.  Use the yield on the ten year treasury bond for the risk free rate.

Answer 4

You should be asking if you can trust the estimated return of a stock first

Answer 5

There is a wide standard variation when you estimate the return of a common stock.  

For the record, the average annual gain of a stock is the current yield (from a dividend) + the estimated growth rate of that dividend.  

For example, if you had a stock yielding 4% and its dividend was expected to grow at at 9% rate the estimated return of the stock would be 13% per annum.