Talk:Rate of return

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Merge with Internal rate of return ?[edit]

I also agree. A TWR is similar to a MWR, of which an IRR is a subset. It makes sense. An IRR is a type of return which is very important to asset mgmt firms.

I agree with the merge idea, but I would want to see redirects kept in the places of the merged articles, as IRR - at least - is a common term. Mmccalpin 13:37, 5 April 2006 (UTC)

The internal rate of return (I am not so sure) when I started the merging process, I never intended it to be one of them, maybe a quick reference. Internal rate of return has more to do with the time value of money, thus a projection or forcast; not a way to compute actual return and anlyse it.Paul.Paquette
Thier are many different rates of return, and each one has it positive and negative aspects. This article is an attempt to put some perspective to the various forms, and to develop a comprehensive understanding in the broader picture. Paul.Paquette
The internal rate of return on investment is a special concept of Enterprise Economics which might cause confusion if merged here. For this reason the article should be given a structure. I personally consider the ROI not necessarily be a percentage while rate of ROI would be a percentage. In newspapers etc. this difference seems NOT to be applied.
The equations and formulars I read already here merely are finance-mathematical methods to search for or handle time-rows of payments got. These are applied not only to ROI.
I would suggest to define ROI in this article as the difference between the costs of an investment including depreciations and the revenues caused by this investment.
Dipl.-Volkswirt (bdvb) Augustin (Political Economist) 18. April 2006
Having thought about it in more details some costs, revenues payments have to be left away to get the ROI. 1. companies tend to have revenues that are not linked to the subject of their business. Car producers for example sometimes sell real estate they don't need any longer. They get revenues then that are not caused or generated by their investments or by the capital used for building cars. 2. companies have costs that are not linked to investments or capital - for example common costs not cuased by the macine to produce a particular model offered by a car producer.
So to get the ROI some of the costs and revenues have to be removed from the profit-or-loss-calculation. And there several levels of aggregation - if the degree of aggregation is reduced then more of the costs and revenues have to be left away to get the correct ROI.
I tend to think that this should be focussed on.
Dipl.-Volkswirt (bdvb) Augustin (Political Economist) 19. April 2006 10:50 MEST
I disagree with the merge. The ROI is simply the return on a wide number of investments. The IRR is typically used for businesses when evaluating whether or not they should move forward with a project. It is used to discount the projected cash flows.
—Preceding unsigned comment added by (talkcontribs) 22:29, April 28, 2006
Like User:Paul.Paquette, and User:Ekkehard Augustin (Dipl.-Volkswirt (bdvb) Augustin) and User:, I disagree with merging rate of return with internal rate of return, which is a different concept, one used in evaluating whether a project should be undertaken. —Lowellian (reply) 10:47, 25 May 2006 (UTC)

Almost everybody seems to be against merging with Internal Rate of Return. This makes sense since IRR is a capital budgeting method and ROI is not. I have removed the tag Smallbones 10:11, 18 June 2006 (UTC)

I changed the title of this section to separate the discussions on different merges. I am also moving the remarks on merging with Rate of return on investment to separate section. Ruerd 09:01, 30 December 2006 (UTC)

rate of return[edit]

Efudd - Most mutual fund companies (to wit: Fidelity and Vanguard) display "total annual return" and "cumulative total return". It would be usefule to explain how those are calculated.

Also if I use as an example a $100 investment that gains 10% in the first six months and loses 10% in the final six months, with the arithmeic return calculation I get: Vi=100, Vf=99, ROR=(99-100)/100=-1% (how true: I lost 1% of my investment after one year!) and not zero as the text seems to imply. With the geometric average calculation I get: square root of (1.1*0.9)=0.995, equivalent to -0.5% which is actually higher than the result of the arithmetic average (i.e. it makes the rate of return look better than it really was!) I suspect that what mutual fund companies call cumulative total return are calculated using the arithmetic average formula, and what they call average annual total returns are calculated using the geometric average formula, but it would be nice if some expert could verify that and explain it clearly.

Total returns informed by mutual fund companies imply reinvestment of all profits, thus it has to be averaged geometrically, like you did in your example, be it cumulative or annual. I guess the difference between those two words, is that cumulative means for the whole period, which could be less than a year, several years or a non-integer amount of years, while annual means the return per year (could be the result of an average or "annualization" of the cumulative return).
On the other hand, I wouldn't say that returns have to be averaged geometrically always, because that holds only as long the gains are reinvested. If not, an arithmetic average would be the correct one, although (unlike IRR or NPV) it would reflect no information about when the profits are realized, so it would be kind of a poor measure, but at least not an incorrect one like a geometric average.--Andrés Djordjalian 01:43, 10 August 2007 (UTC)
On second thought, I think I remember reading about a criterion for incorporating timing in the those cases where profits are not reinvested (at least not in the same investment), which is considering that one will obtain the same return elsewhere, so we may use geometric averages all the same. So I wouldn't rush into saying that geometric averages are incorrect for those cases, as they may be if we use criteria like these.--Andrés Djordjalian 01:49, 10 August 2007 (UTC)

The mutual fund returns section has been significantly upgraded; I strongly suggest however redoing the hypothetical account/return calc table to use what the SEC says to use which is a hypothetical initial investment of $1,000-- this example uses $100; further, a share price of $100 per share also makes it a little less real-world, I suggest $10/share. Lastly, the 'return' of the investment without reinvestment (ie divs and distributions in cash) doesn't appear to be accurate. The cumulative return of a cash option account would be total earnings/total cost.... total earnings = cash received plus the unrealized gain or loss on the fund shares whos share balance did not change as no additional investments were made. This return is not the standardized SEC return but nonetheless would be the true or real return on such an account. —Preceding unsigned comment added by CRoetzer (talkcontribs) 06:24, 15 May 2009 (UTC)

Trying to clarify ROI article[edit]

I'm trying to clarify the ROI article. How do I go back and ad edit notes?

Please sign your comments with ~~~~ mrholybrain 23:13, 2 September 2006 (UTC)

Things I Disagree With[edit]

"Cash Flow (Income Stream)": I don't agree with any of this section. It is the cash flow that determines the ROI. The ROI does not measure the cash flow.

"Annual Returns - An Annualized Rate of Return": I don't believe anyone uses the arithmetical average to state returns. Certainly no one in the finance business. The rate people quote is the rate that would equate all the other cash flows if compounded yearly at the rate.

"ROI Calculations for Various Uses": I think the first paragraph should be deleted. It is way off topic. In the second paragraph, to say "ROI values typically used include Dividend yield, Net profit margin and Return on assets" is wrong. ROI has nothing to do with these other measures. They measure completely different things, from the point of view of different groups of people.

There is more I disagree with, but I bet you wish I'd shushup 01:43, 7 September 2006 (UTC)justsaying

   If the cash flow determines the ROI, why don't you see the ROI as a 
   percentage/standardized measure of cash flow?
Because returns don't have to be realized in cash to be real. I hold stock for long periods. Each year I measure a ROI using the year-end market values. Don't you? I don't have to sell before I can claim a return.

What do you think of the wording "cash or potential cash" to cover this?

   Unfortunately many people don't know or don't consider the fact that computing an
   average of periodic percent values for returns doesn't always translate accurately to
   dollar returns. Finance textbooks include many examples where periodic percent returns 
   are averaged.  These textbooks do not clearly note that those average percents do not
   necessarily translate to dollar loss/gain.  And the popular press doesn't seem 
   to worry about talking about averages of +/- percents.
I know it is nice to think everyone else is stupid, but did you never stop to check their numbers. I have, and I know that the US and Canadian press and Mutual Funds always use the word 'average' simply because it is the only 'word' that is understood. What word do you use when talking to non-finance friends? They are not stupid. The percent they quote is the correct one - using correct compounding.

I KNOW everyone else is NOT stupid, but occasionally eveyone makes math errors, including me. I use "annualized." I also don't assume compounding, because that's a reinvestment option.

   Why is it off-topic to note how personal investors evaluate their investments?  
Because the topic is not "Metrics for valuation". There are dozens of ratios that mean different things... but don't measure return and don't include the investment. 'Rate of return' and ROI have specific meaning. Creating a brain dump doesn't help anyone.

Sorry if this seems like a brain dump. But frankly, I'm just trying to make some of the numbers clear to people who are interested in this Wikipedia topic. I'm doing the best I can. If I'm wrong on calculations or anything else, please correct the article.

   Why do you think that Dividend Yield, etc. aren't measures of Return on Investment?
Because dividends don't measure all the return. Because profit margins don't include an investment $, etc. These are valid valuation metric. But they are not 'rate of return' or ROI.

I've tried to address the issue of capital gains/losses. Anything you can add is greatly appreciated. 01:54, 15 September 2006 (UTC)

   Your feedback is greatly appreciated. 02:05, 8 September 2006 (UTC)

Useful Edits[edit]

Recent edits have been useful in clarifying the article [other than those vandalism edits, which are, thankfully, gone].

If anyone has time, it would be helpful if you'd check the math and equations for mutual fund investments.

This article is rated as "in need of expert attention," but I'm not sure where the expert is. So keep those constructive edits coming!

Merge Rate of return on investment into this article ?[edit]

I suggest you merge Rate of Return with Rate of Return on Investment. The only caveat I can think of is that some contemporary investments use "return" to indicate compound/reinvestment "rate of return." I guess the FDIC keeps the banks honest regarding the difference between capital and return-on-capital, but the SEC can always say, "Didn't you read the fine-print footnote on page 14?" 02:46, 3 September 2006 (UTC)

agree, but what about the size of the page, it is getting even bigger this way--Afa86 02:02, 5 November 2006 (UTC)

I saw the remark that Rate of return on investment needs to be merged into this article. I think the information in Rate of return on investment is not very accurate and too verbose. I have added a link to the Mathematics of Interest rate setion of the Compount interest page and I think this does the merge. It is just one extra line but it still covers Rate of return on investment completely. The only thing that still needs to happen is deleting the page Rate of return on investment. Ruerd 08:54, 30 December 2006 (UTC)

The Rate of return on investment article doesn't seem to address a general audience by starting with the basics then moving into more esoteric/technical stuff. Don't know if the technical stuff is accurate. If it should be merged, who does it? SueHay 01:14, 3 February 2007 (UTC)

This suggested merger seems to have been done now.

Jonathan G. G. Lewis 09:18, 18 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

Exponential Decay of Returns[edit]

This section in the article seems to be about probability. Does it fit here? SueHay 01:24, 3 February 2007 (UTC)

This section talks about a very suspect (crankish) concept that doesn't appear in any reputable peer reviewed publication that I'm aware of. Perhaps the posting belongs in a "small firm effect" entry which indeed is a testable hypothesis within finance that has been entertained by some. The attempted use of the large law of large numbers here though is mistaken.

This needs to be read in conjunction with ROTI. (Return on Time Invested). I think this is a brilliant concept. It brings in the value of time which is becoming more and more vital a resource. A resource which is non renewable, nor compressible, and allows no compromise. It is important for any achiever to understand the value of time. I am also happy to read another article on ROTI by Chester J Bowling. This is available online at We need to study more of this. —Preceding unsigned comment added by (talk) 06:41, 19 February 2008 (UTC)

Return-on-Investment for capitial equipment purchasing decisions[edit]

ROI is often used to determine when to invest in equipment, especially equipment used in manufacturing. Something needs to be said about this. 00:43, 10 February 2007 (UTC)

There's information about this in capital budgeting. I'll add a link. 18:26, 10 February 2007 (UTC)

Switch "Rate of Return" with "Return on Investment" article?[edit]

Currently the "Return on investment" contains a hard redirect to this article, Rate of Return. Im wondering if this should be turned around. The text in this article only mentions the term rate of return once, while ROI is used a lot more often. Also, the term ROI strikes me as being used more often then ROR. How about moving this article to "Return on Investment" and making a hard redirect out of the ROR article? --Excirial (Talk,Contribs) 14:50, 16 November 2007 (UTC)

I'd agree wholeheartedly to turning around the two terms in order of priority. ROI is a term that has become a business buzz word. Someone who then gets redirected if they're trying to figure out what is behind it, might think they've made a mistake. The same reasoning would apply to merging this article with "Carry" unless that would become a subsection. Making an article increasingly hard to swallow for anyone who doesn't have studying the subject as their main occupation in life, doesn't really improve it's quality in my book. —Preceding unsigned comment added by (talk) 23:40, 5 December 2007 (UTC)

Beotian needs simple info[edit]

What ROI is typically considered good in corporate America ? Is 5% good ? I keep hearing 15% , but i don't know. I-do-do-you? (talk) 02:43, 13 January 2008 (UTC)

Disagree - "in finance, ROR ROI, or sometimes just return"[edit]

Appreciate the effort of all contributors.

"In finance, rate of return (ROR) or return on investment (ROI), or sometimes just return,"

I believe the the statement "or sometimes just return" maybe somewhat misleading. When I teach basic finance at university I'm more likely to use the term "return" to refer to holding period returns. I do use return in the context of ROR ROI ROE etc when discussing these areas, but would contest that these are referring more to accounting returns, more so than in 'pure' finance. Whilst I concede that I do teach accounting returns, I do not agree that "In finance" accounting returns are "sometimes just return,". I think it is misleading as it stands.

"or sometimes just return" should be deleted as it is confusing and does not add to a readers knowledge of finance.

Regarding the question of merging with IRR. As has been previously mentioned, the two are totally different. ROR ROI are more in line with accounting returns and IRR is in the category of project evaluation or capital investment, along with NPV and so forth.

Cheers Mark —Preceding unsigned comment added by Mark ok7 (talkcontribs) 08:48, 12 July 2008 (UTC)

I agree that the phrase "or sometimes just return" should be deleted. Finnancier (talk) 06:59, 23 August 2008 (UTC)

I have now removed "or sometimes just return"

Mark ok7 (talk) 01:55, 8 January 2009 (UTC)

Annualized return - this section is over-simplified and not accurate[edit]

The section on annualized return is inaccurate. By simply multiplying or dividing the return (or the return period) by a factor which is proportional to the one year period, the model described fails to account for compounding. Now, I actually don't know the right formula for converting the return of an arbitrary period of time into an annualized return, but I hope somebody does, because the way it's described now is only accurate if there's no compounding at all, and in fact it's not even accurate for the little-used (in the real world) case of "simple interest". Beanluc (talk) 17:12, 18 July 2008 (UTC)

I hope that my rewrite to-date of the work of previous contributors has answered this complaint.
Jonathan G. G. Lewis 07:30, 19 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

Annual returns and annualized returns - Example is probably wrong.[edit]

At the end of this section there is a simple example of a four year investment with profit of 265$. It is suggested that the annualized return is (1265/1000)/4 = 6.625%. But according to previous section: Geometric average rate of return. The annualized return is a geometric mean, hence should be (1265/1000)^(1/4) - 1 = 6.05%

I am not sure of this analysis, so I don't change the text, but if you are - please change! --Yuvalaviel (talk) 13:19, 25 March 2010 (UTC)

Totally agree. The example uses "Compound Yield" which is not defined anywhere, is afaik non-standard & (as pointed out above) not really meaningful.
Unless someone objects, I plan to come back top this page & remove all references to "Compound Yield" & replace with Arithmetic average rate of return + geometric.
Going, going, gone...

--Tony999 (talk) 05:52, 8 August 2012 (UTC)

@Tony999, I totally agree with you. We should definitely remove any references to compound yield. I have never heard of this term, and it was not defined any where in the article. I also suggest removing the two example tables, since they are using compound yield calculation and no text content was referring to these tables.Zsljulius (talk) 19:25, 18 October 2013 (UTC)
The example I think being referred to (which wasn't my work, by the way) appears to assume no reinvestment. I have left it in, and repaired it, but making that point explicit.
Jonathan G. G. Lewis 09:52, 19 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

Removed paragraph[edit]

I've removed the following paragraph because it relates tangentially to the subject at hand.

"A stock share is partial ownership of a company, and the value of the stock depends on many factors, including the likelihood that the company will pay a dividend (a distribution of profit to shareholders). When stock shares are first offered for sale, the company receives the capital from the stock purchaser and uses the capital to operate its business. Once stock shares are sold to investors, the investors can sell the shares to other investors. Publicly-traded companies’ stock shares are bought and sold (traded) on the stock markets."

Finnancier (talk) 06:59, 23 August 2008 (UTC)

Dollar cost averaging[edit]

The article appears to only discuss return calculation based on a lump sum investment. We should also discuss the return calculation when money is invested over a period of time, such as DCA. --Kalbasa (talk) 16:56, 6 January 2009 (UTC)

Have you checked out the Dollar cost averaging article?
Jonathan G. G. Lewis 03:08, 14 January 2014 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)
I see from your comment on the Talk page for that article that you have already seen it.
Jonathan G. G. Lewis 03:56, 14 January 2014 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

rate of profit[edit]

I'd like others opinion, but to me "rate of profit" is a totally different area. In finance, Return has to do with holding period or market returns. In accounting they may have to do with 'profit', but not in the finance disciple.

Cheers, Mark

Mark ok7 (talk) 01:53, 8 January 2009 (UTC)

Whether the word profit may be used in the context of rate of return depends on how broadly you apply it, thereby risking offence to specialists in either accounting or mathematical finance, but the Oxford dictionary has no qualms using profit to define return. There does not seem to be a safer word with any less accounting semantic baggage.
Jonathan G. G. Lewis 07:24, 19 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

Jargon and Mathematics[edit]

Please eliminate technical jargon and complex computations from this article. This article is intended for general audiences. Please move more technical details to another article within this encyclopedia. Your assistance is greatly appreciated. (talk) —Preceding undated comment was added at 01:34, 16 January 2009 (UTC).

I would like the maths and jargon to stay where this is useful and properly explained. Mathematical literacy should not be assumed and the article should be readable without understanding the maths. But, on the other hand, this is a topic that cannot be understood fully without the maths. As for jargon, I'm in favour of useful and properly explained jargon. If neither the maths nor the jargon are here, then where should they be? At the Wikipedia for clever people? Paul Beardsell (talk) 23:57, 16 January 2009 (UTC)

Removed false(?) statement.[edit]

I have removed the following as it is false, or, if it is true, it is unsupported by citation despite request for such.

An investment that is held longer has an annualized ROI that is closer to zero.[citation needed]

Paul Beardsell (talk) 23:51, 16 January 2009 (UTC)


Be bold. You clearly have some strong opinions about the quality of the work in the article, so just assess it yourself. Templates like "poor assessment" don't really do anything. Just rate it and remove the tag. Protonk (talk) 08:33, 2 March 2009 (UTC)

It takes work to properly assess an article. I don't have time right now to do the work. It seems others are prepared to assess without doing the work. That should be flagged. I want to flag improperly performed assessments so that such indecently treated articles can be revisited. Paul Beardsell (talk) 08:40, 2 March 2009 (UTC)
I quote from the assessment template, above: "This article has been rated but has no comments. If appropriate, please review the article and leave comments [[here]] to identify the strengths and weaknesses of the article and how best to improve it.". There is nothing at the "here". Paul Beardsell (talk) 08:43, 2 March 2009 (UTC)
So leave it flagged if you like. I will suggest that flagging assessments of articles where no comments have been left will be a daunting and thankless task. We may disagree on the purpose and practice of the assessment system, so I'll leave it at that. Protonk (talk) 08:49, 2 March 2009 (UTC)
I am doing so. I am flagging assessments as poor where they are unreasoned. Interestingly the assessors do NOT like being assessed. Paul Beardsell (talk) 08:58, 2 March 2009 (UTC)
If you want to go around flagging assessments as poor instead of just redoing them, that's your business. Protonk (talk) 17:26, 2 March 2009 (UTC)
I quote further, ibid: "If you would like to participate, please visit the project page, where you can join the [[discussion]] and see a list of open tasks." There is nothing at "discussion" about this article. Paul Beardsell (talk) 08:46, 2 March 2009 (UTC)
There doesn't have to be. That link is to a project page whose discussions churn. Some projects implement tasking systems, some don't. The existence of flags on that template doesn't present a literal directive to assess an article a given way. Protonk (talk) 08:49, 2 March 2009 (UTC)
There is no evidence of any reasoned assessment anywhere, that is my point. Paul Beardsell (talk) 08:58, 2 March 2009 (UTC)

Total Returns[edit]

Could somebody justify or cite a source for the definition of Total Returns that is given on this page? The way the Reinvestment Factor is used here, your returns are going to be too strongly affected by the final period's Distribution--make that zero, and that undermines distributions from all other years.

I believe it makes more sense to simply multiply successive Reinvestment Factors rather than adding 1 after multiplying with Di/Pi. Morningstar, Inc. takes this approach, as can be seen on page 19 of the document called "Morningstar Rating™ for Funds Methodology", which can be found here.

I couldn't find any useful results for the term Reinvestment Factor on Google search except those that leech from this Wikipedia page. So if this is wrong, it had better be checked soon because it's propagating everywhere. The next formula on the page (Annual Average Geometric Return, as required by SEC) makes perfect sense.

-Ankurtg (talk) 06:07, 14 July 2010 (UTC)

I rewrote this section a while back.Jonathan G. G. Lewis 12:50, 23 August 2014 (UTC)

Rate of return (ROR) and Return on Investments (ROI)[edit]

Are they same? I come from a different background so am wondering how? Ganesh J. Acharya (talk) 08:21, 11 April 2011 (UTC)

The term return on investment seems to have had a more specific accounting origin[1]. Accountants make reference to ratios which use the return as the numerator with things other than investment as the denominator. Nevertheless, some may consider it redundant to emphasise that we are referring to the ratio of return and investment - a bit of a pleonasm.
Secondly, rate of return seems to be generally reserved for the return per monetary unit of investment and per period of time, so it is a rate, or ratio, in two senses. The term return on investment does not make this explicit, even if sometimes the result is annual.
Jonathan G. G. Lewis 06:57, 19 November 2013 (UTC)


I have substantially rewritten the early parts of this article.

Jonathan G. G. Lewis 12:43, 18 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I have revised everything up to the end of the 'Calculation' section. The following sections look rather repetitive, but I will stop here, at least for now.

Jonathan G. G. Lewis 06:27, 19 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I have removed the first paragraph under 'Uses', because it is unnecessary to have a second definition, the definition is confusing and refers imprecisely to cash flow:

  • ROI is a measure of cash generated by or lost due to the investment[citation needed]. It measures the cash flow or income stream from the investment to the investor, relative to the amount invested. Cash flow to the investor can be in the form of profit, interest, dividends, or capital gain/loss. Capital gain/loss occurs when the market value or resale value of the investment increases or decreases. Cash flow here does not include the return of invested capital.

Jonathan G. G. Lewis 08:22, 19 November 2013 (UTC)

I have made a few more changes to following sections, but I can see plenty of room for further work to improve the article.

Jonathan G. G. Lewis 09:47, 19 November 2013 (UTC)

I have removed the first paragraph under 'Summary: overall rate of return', for the same reason as I removed the first paragraph under 'Uses', namely that it is again unnecessary to have a second definition, the definition is confusing and refers imprecisely to cash flow. It read:

Rate of Return and Return on Investment indicate cash flow from an investment to the investor over a specified period of time, usually a year.

Jonathan G. G. Lewis 10:50, 19 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I have just attempted some more corrections and improvements within the section rather cryptically entitled 'Cash and potential cash returns', although I do not understand the title, and I do not see the connection between the title and the content, so I may come back later and change it. The rest of the article below this point I find rather repetitive and irrelevant. Maybe some other editor can extract the important points about US rules on reporting returns.

Jonathan G. G. Lewis 08:45, 20 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I am about to attempt to break up what is currently the final section:

Summary: overall rate of return[edit]
ROI is a measure of investment profitability, not a measure of investment size. While compound interest and dividend reinvestment can increase the size of the investment (thus potentially yielding a higher dollar return to the investor), Return on Investment is a percentage return based on capital invested.
In general, the higher the investment risk, the greater the potential investment return, and the greater the potential investment loss.

I have already added the point made in the first paragraph to the definition at the top of the article.

I will now move the point made in the second paragraph to the top of the section entitled "Returns when capital is at risk".

Jonathan G. G. Lewis 09:05, 21 November 2013 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I have changed my mind about the second paragraph. I have struggled to make it a simple free-standing logical point, but I have failed, and just removed it altogether. It is a statement of orthodoxy, but on its own with no evidence, argument or supporting citation provided, it is a rather uninformative bald statement, which I think belongs in context in an article on investment risk, rather than on its own in this more basic article.

Jonathan G. G. Lewis 09:40, 21 November 2013 (UTC)

Everything in the section Reinvestment when capital is at risk: rate of return and yield and everything below that section I find to be repetitive and long-winded, and as a consequence it is not very clear. I have not touched these yet, but I invite any interested expert on the subject to have a go at sprucing up the rest of the article.

Jonathan G. G. Lewis 04:11, 14 January 2014 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I have removed both the confusing reference to yield and the calculation of ROI from the example I have now also retitled as US income tax on investment returns because I think it was both unnecessary and incorrect.

The formulae for the undefined term reinvestment factor in the section headed Total returns look nonsensical, and their application in the example below looks completely wrong, but I have decided to leave it to an expert on US income tax to correct this.

Jonathan G. G. Lewis 08:07, 14 January 2014 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

I have gone back on my previous decision, and I have removed the suspect formulae for reinvestment factors, and the line from the table in the example referring to them, and corrected the calculations of returns.

Jonathan G. G. Lewis 09:08, 14 January 2014 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)

  1. ^ .  Missing or empty |title= (help)