When you invest in the stock market, it's wise to know which investments are performing well and which are not. One way of ranking investments according to their performance is the percentile method, where you rank investments according to how well they perform over time. This method is similar to ranking high school students at graduation; the higher the performance, the higher the percentile rank. Percentile rank is calculated using the formula rank =(p/100)*n where p is the percentile and n is the number of items in the portfolio.
1. Rank the investments in order from highest to lowest. If you are comparing the reported investment performance of stocks in your portfolio, you might choose to use one-, three-, or five-year historical performance.
2. Decide which percentile you want to know. For example, you might want to know which of your stocks are in the top 30th percentile of your 20 investments. Insert "25" as 'p' in the percentile equation and "20" as 'n': rank = (30/100)*20 = 6.
3. Count down from the top of the list according to the result in Step 2. In the above example, you would count off the first six items in the list; all items including the sixth item and those items above the sixth position in the list are in the top 30th percentile.
- If you want to know which investments rank in the bottom percentile, start at the bottom of the list and count up instead of down in Step 3.
Items you will need
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