To calculate expected rate of return, you multiply the expected rate of return for each asset by that asset’s weight as part of the portfolio. You then add each of those results together.

The goal of rational investors is to maximize total return under a given set of constraints.

Wise investors calculate the return they expect, based on the weighted probability of all possible rates of return, before parting with their money.Indeed, no company or individual should invest ...

One simple but powerful method investors can use to assess the risk and reward of a stock portfolio is using the Capital Asset Pricing Model, or CAPM, model for expected returns.

Total return can be highly useful when you're assessing the performance of your investments and comparing their performance to each other or to the overall stock market.

In order to make educated decisions when investing, you need to determine how much you could make on that investment. To do this, you need to calculate return on investment, or ROI.

Key Takeaways To calculate a portfolio's expected return, you need to compute the expected return of each of your holdings and its weight.

For a portfolio, you will calculate expected return based on the expected rates of return of each individual asset. But expected rate of return is an inherently uncertain figure.

Whether you’re calculating the expected return of an individual stock or an entire portfolio, the formula depends on getting your assumptions right.