Can someone explain about return on ivestments?

issiah · Apprentice Joined: 29 Mar 2006 Posts: 6

Q: Hello, there! I would really be grateful if there was someone who could help me. I need someone else's opinion. The thing is that a couple of months ago a friend of mine undertook an exciting venture. So far everything has been going well; however, I'm thinking of making an investment myself. What interests me is the "reaping" the profit, I guess everyone is interested in it. Especially, since I'm planning on another worthwhile investment in the next couple of years. Anyway, when setting up the investment, I heard that I have to be careful about the ROI. Can someone explain anything about return on investments? Thanks in advance! Mark

wade · Apprentice Joined: 22 Oct 2005 Posts: 10

A: Hello, Mark! It's great that your friend is doing fine and that you are thinking about venturing yourself. I've had various experiences of that kind so,from my point of view, it's good that you are cautious. Regarding the ROI or the return on investment I can tell you the following, Mark. It is shown in percentages, as you already know. Basically, it stands for the proportion between your investment, on the one hand, and a possible amount of money which you may either gain or lose. As far as I know, it is calculated for the period of one year from the moment your financial venture begins. There are numerous aspects which can affect the return on investments. For example, taxes, the way how succeful is the company you invested in and, of course, the sum of money you have invested. Hope this helps. Josh