Understanding Return on Investment (ROI)

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When we talk about Return on Investment, or ROI for short, we’re simply asking a straightforward question: If I put my money into something, how much will I get back? It’s a basic concept, but it’s at the heart of every smart investment decision, especially in the stock market. Often, it is measured per year.

Let me break it down for you with a simple example. Let’s say you invest $100 in a stock at the beginning of the year. At the end of the year, that investment grew and is now worth $110. That extra $10 is your return. So if you do the math, $10 out of $100 is 10%. That’s your ROI—a 10% return on your investment over one year.










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