Holding rate of return refers to the ratio of interest or dividend income and bid-ask spread to fund purchase price during the period when investors hold funds. In today's market, the bid-ask spread is the main part of profit.
Extended data:
Holding period yield refers to the ratio of dividend or dividend income and bid-ask spread to stock purchase price during the period when investors hold stocks. Holding period yield is the comprehensive yield of investors' investment in stocks.
Holding period yield refers to the ratio of dividend or dividend income and bid-ask spread to stock purchase price during the period when investors hold stocks. There is no expiration date for stocks, and the time for investors to hold stocks varies from a few days to several years. The holding period rate of return is the ratio of all dividends and capital gains of investors to the investment principal in a certain holding period. Holding period yield is the most concerned index for investors, but if we want to compare it with other financial assets such as bond yield and bank interest rate, we should pay attention to the comparability of time, and we can change the holding period yield into annual yield.
Holding period yield is the comprehensive yield of investors' investment in stocks.
In a market economy, there are four factors that determine the rate of return:
The productivity of capital goods, that is, the expected rate of return of coal mines, dams, highways, bridges, factories, machinery and inventories.
Uncertainty of capital commodity productivity.
People's time preference, that is, people's preference for immediate consumption and future consumption.
Risk aversion is the part that people are willing to give up in order to reduce risk exposure.
computing formula
r=[D+(P 1-P0)/n]/P0
D is the annual cash dividend, P0 is the stock purchase amount, P 1 is the stock sale amount, and N is the number of years the stock has been held.
Holding period yield Rhp :Rhp = holding period ending value/holding period beginning value-1.
The holding period yield Rhp can also be converted into the equivalent yield Rg of each period. If calculated with compound interest, the relationship between holding period yield and equivalent yield can be expressed as: (1+Rg)N = 1+Rhp.
Where n is the number of cycles in the holding period.