Talk:Holding period return

Questionable definition
I did a bit of clarifying, but I'm not sure the definition and math are correct. Someone who works with this regularly needs to look at it. -- SueHay 23:13, 1 March 2007 (UTC)
 * See Internal rate of return and rate of return, and think about the mathematics of averaging percentages. That's unreliable math. --SueHay 02:58, 4 April 2007 (UTC)


 * Please clarify to what you refer, when you say, "That's unreliable math." Jonathan G. G. Lewis 17:02, 22 August 2014 (UTC)

Is the calculation about the quarterly return correct?
Is the following correct???

From quarterly holding period returns

To calculate an annual HPR from four quarterly HPRs: If HPR1 through HPR4 are the holding period returns for four consecutive periods, the annual HPR is calculated as follows: 4th root out of(1 + HPR)= (1 + HPR1)(1 + HPR2)(1 + HPR3)(1 + HPR4)

I would have thought since the returns are not annual, but quarterly, the annual return would be the product of the four variables...I am I thinking about this incorrectly?? If the four periods were annual periods, then I would have said the effective annual return is the 4th root of the product of the four variables... —Preceding unsigned comment added by SECulp (talk • contribs) 20:05, 21 September 2007 (UTC)

Sorry, but I forgot to add a variable here...I think the formula for the annual holding period return in this example is as follows:

HPR = [(1+HPR1)*(1+HPR2)*(1+HPR3)*(1*HPR4)] - 1 —Preceding unsigned comment added by SECulp (talk • contribs) 15:23, 24 September 2007 (UTC)


 * It looks like the confusion here between holding period return and annualised return has been cleared up. Jonathan G. G. Lewis 17:07, 22 August 2014 (UTC)

Sloppy and inconsistent
The article is sloppy and inconsistent. Sometimes the HPR is described as a "percentage" - in which case the formulae are missing a factor of 100. That the HPR is NOT an annualised rate of return needs to be made clear as that is the ESSENTIAL point! But also the definitions and explanations can be read as describing a monetary value not a proportion/percentage. It seems to me that HPR can be either:
 * the total income and gain on an asset expressed in monetary terms. E.g. the HPR on my investment was $27,000.
 * the total income and gain expressed in percentage terms. E.g. The investment returned a total of 27% over the period I owned it.

I suggest the former is a HPR, the latter is a "holding period rate of return". Plain and simple English and consistency with other WP articles demands this, failing any citations.

Paul Beardsell (talk) 01:09, 2 March 2009 (UTC)


 * Personally, I follow Microsoft Excel, and see percentage as a format for presenting a number, rather than a transformation on a number, accordingly 1% and 0.01 for example are fundamentally the same. Certainly, when handling computations involving returns (and rates of return), it's wise to avoid multiplying or dividing by 100 unnecessarily all the time.


 * As mentioned at the head of the article rate of return, there is a common ambiguity in usage of the term "return". In my personal experience, it is used to refer to a monetary change in value only occasionally these days. Commonly it seems, it refers to the proportion of the starting value. Jonathan G. G. Lewis 17:23, 22 August 2014 (UTC)

Net vs gross
And who says it is "net income"? Seems to me you can have a "net HPR" and a "gross HPR". Paul Beardsell (talk) 01:11, 2 March 2009 (UTC)


 * It looks like this point has been noted, and any reference to net or gross removed. Jonathan G. G. Lewis 17:25, 22 August 2014 (UTC)