Gain
Contents
Gain is calculated as Total Gain, Realized Gain, and Unrealized Gain.
Total Gain
Gain in plain language is:
What you have from your investment now (Ending Market Value plus money you received during the period from sales and cash dividends. Note that Ending Market Value already contains reinvested distributions.)
minus what you put into the investment (Beginning Market Value, purchases.)
The formula below shows the equation with convenient groupings in parenthesis.
Percentage Gain
Percentage gain is calculated using a return on investment calculation.
Realized Gain
Realized Gains are based on sales during the period. The Realized Gain is the net amount from the sale minus the basis of the security sold.
Realized Gains are DURING the period not FOR the period. The basis used may be established before the beginning of the period, so the gain was realized during the period, but it is not only based on the growth of the stock during the period being measured. To show a realized gain only for the period measured could lead to mis-reporting gains.
Unrealized Gain
Unrealized Gain is calculated as Total Gain - Realized Gain
See Also