Calculating Actual Performance:

We are asked Frequently how to determine actual performance. Here is an example for a one year investment of $1800 in Altria Group (MO)

Current Price (current value) ……………$2120
Purchase Price (Amount Invested) …. $1800

Gain or (loss) ……………………….. $320
Add Dividends ……………………… $144
Total ………………………………… $464

$464/1800 = 0.257777
Multiply by 100 = 25.7%

26% Return

Divide by the term for longer periods. Pretty simple, ay!

Often, the dividend(s) is overlooked, but they are a big part of the return which keeps on giving.

Importantly, if you reinvest the dividend, which in this case would buy approx. 7.2 shares @ $20 per share which will increase the div. amt. every quarter; thus, the magic of compounding begins.