How to Calculate Annualized Rate of Return
In this example, since we are only 17 days into the year, you divide 17 by 365 to get .0465753
The Rate of Return is 2.13% or .0213
So, the formula looks like this:
Looks pretty good, doesn't it? Well, don't count on it staying that high for long. The closer you get to a full year, the smaller that number will be (unless you are one genius of a stock picker!) You can play around with the numbers to see what I mean.
Now I'm open to any questions and comments you might have.
Tags: Calculating Annualized Rate of Return, How to Calculate Annualized Rate of Return, Investing Math