by Slippy Slappy

Basic investing concept: ROI

If you’re new to the investing world, you may have heard of the term “ROI” but you don’t know what it means. “ROI” stands for Return on Investment and it is a term used to describe what you get back from what you’ve put in.

Absolutely everything we buy is a type of investment and absolutely everything we buy has a return.

The investment of a car has a return: It gets us to our jobs, it keeps us from having to walk everywhere, etc.

The investment of a stick of gum has a return: It tastes great for a short while and it can make our breath fresh.

A lot of times ROI is expressed in a dollar amount: The investment of a futures contract has a return: By buying a futures contract and selling it later at a higher price, the trader can make money. If he or she buys a contract at 0 and sells it at 0, the return on investment (ROI) is . This figure is derived from subtracting the final result of 0 from the initial investment of 0. was the amount made. Conceptually, is the return that the person received from investing 0.

While that is a nice, basic way to calculate ROI, and it’s useful in many situations, Return on Investment, though, can be more complex to figure out than that, especially when anticipating what ROI could be. When you are trading an investment and you want to anticipate what your return on investment could be, you need to also think about what you could use that money for elsewhere. Even if the positive return on investment is good, if that money could be better spent on something else, then the return might not be as favorable. To use a really extreme example to illustrate, if you spend 0 to get back , that can seem like a favorable investment but if you spent that 0 when you could have applied it to your mortgage to avoid foreclosure, then the return pales in comparison to the loss of your home.

ROI is a great measure of success. The higher your ROI, the better. So you’ll want to make decisions that can help you to increase your ROI over time. You will calculate ROI for your regular trades but you’ll also want to think about your overall ROI for all investments you’ve made.

By using a trading platform, you’ll be able to monitor what your ongoing return on investment is and it will help you to know when to sell. As long as you continue to generate a positive ROI, and you manage your risk (like in the hyperbolic foreclosure example above), your futures trading will be profitable.

Hector G 484-525-6014. How to calculate ROI on this business. Achievable in 1 month or less, depends on you.
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