# How to Determine Profit or Loss From an Investment

by Mark Kennan

When figuring your profit or loss on an investment, it is easy to just look at the increase or decrease of the price. However, to get an accurate assessment of your gain or loss, you also need to include the effects of dividends paid to you and commissions you paid to purchase the investment and dispose of it. You can report the profit or loss from an investment as a dollar amount, so that you know how much more or less your portfolio is worth, or as a percentage, so you can judge how good or bad the investment did relative to how much you invested.

1. Add the cost of buying and selling the investment, if any, such as commissions. For example, if you paid \$9 to buy stock and \$9 to sell it, your total costs equal \$18.

2. Add all the dividends received as a result of owning the stock. For example, if you received \$19 in dividends each year and you owned the stock for two years, multiply \$19 by 2 to find you received \$38 in dividends.

3. Subtract the purchase price from the selling price of the investment to calculate the gain or loss. For example, if you bought the stock for \$1,960 and sold it for \$1,810, subtract \$1,960 from \$1,810 to get -\$150, meaning you lost \$150.

4. Add the dividends received to the gain or loss and subtract the commissions to find your gain or loss on the investment. In this example, add \$38 to -\$150 to get -\$112 and subtract \$18 to find your total return on the stock equals -\$130, or a loss of \$130.

5. Divide your profit or loss by the initial investment amount to find the profit or loss as a percentage of your original investment. In this example, divide -\$130 by \$1,810 to find your loss equals 0.0718, or about 7.18 percent.