Investment in general is sacrificing the usefulness of current benefit to obtain a greater benefit in the future. Or is the postponement of current consumption for greater consumption in the future and for a greater benefit. Investment must achieve returns in the future and that is the increased amount or the addition to the amount invested, the returns of the investment are the the difference between the amount invested at the beginning of the period and the amount invested at the end of the period . Returns are measured as the number of absolute or as a percentage, rate of return on investment is the percentage of the increase in the amount invested annually to the principal amount invested.
Investment in securities to achieve two types of returns first is the cash flows generated by this investment of each period of time, or so-called distributions of cash (dividend reviews) or kind (the distribution of bonus shares), and the second is the return of the increase occurring on the value of the amount invested at the end of the period (when the sale of securities) and called the profits of capitalism. This increase may be a negative.
It can measure the rate of return on investment in Stocks with providing the following:
1- when the value of the share purchase (value of the investment at the beginning of the period)
2-when the value of the share when selling it (the value of the investment end of the period)
3- the value of dividends on the stock throughout the retention period.
Rate of return = (Selling price - purchase price) + dividends