Been scratching my head over this. Anyone care to check me and confirm my logic is sound. Patrick and gcr's response's in this old thread of mine has got me thinking about this.
http://www.shareforum.co.za/off-topic/anyone-paid-off-their-bonds-before-investing-in-equities/Calculator here doesn't help me with this, as it only allows you to punch in a fixed return(interest) without being able to factor the return should a lump sum have been invested in the beginning of the year, which will give you a different return over a 1 year period, than if you split the lump sum equally over the 12months. Not sure if I'm making sense.
A stock returns 35% dividends reinvested over the last year had one invested a lump sum at the beginning of the year.
I want to calculate performance and end amount should a lump sum of, oh lets say, 1mil invested at the start of the year + 30k monthly deposits over 5 years assuming the stock continues to return the same every year.
Obviously investing only 30k every month over that period will not allow you to achieve a 35% return. A thumb suck result to be around 15% or so.
Am right in saying on the 1mil lump sum invested at the start, the return would be 35%, and on the 30k monthly investments 15%.
Then in the second year, total invested(lump sum+monthly deposits) + returns will again earn a 35% return, and the 30k monthly investment 15% and so on for the remaining years?
