Financial

Annualized gain

Annualized gain

If stock X appreciates 1.5% in one month, the annualized gain for that stock over a twelve month period is (12 x 1.5%) = 18%. Compounded over the 12 month period, the gain is (1.015)^12 -1 = 19.6%.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Annualized Gain

A gain on an investment expressed in yearly terms, even though the variable does not directly apply to a year. That is, an annualized gain has been mathematically converted to yearly terms. For example, if the return rate on an investment is 2% after one month, one computes the annualized return by multiplying by 12, resulting in a 24% return rate. An annualized variable is often theoretical; there is no guarantee that the return rate in the example above will be 24% if it is calculated after only a month or two.
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References in periodicals archive
That brought the three-month annualized gain to 25.3 percent, the fastest pace in figures going back to 1992.
Average hourly earnings declined one cent, for an annualized gain of 2.5 percent, mostly because wages were unusually weak in December 2014.
Since 2009, the Standard & Poor's 500 Index has rallied more than 200 percent, roughly matching the average annualized gain in the last seven bull markets.
The nearly 20 percent annualized gain is twice the rate of growth in the S&P 500.
The fourth quarter decline follows an annualized gain of 3.1% in the third quarter.
Even if you adjust for inflation, it's still a 13 percent annualized gain.
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