Holding Period Return - HPR

Motley Fool  Feb 22  Comment 
An investment's performance over a single year isn't the best indicator of whether it's worth buying or holding. That's why smart investors look at annualized returns over longer periods.


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The holding period return (HPR) is the rate of return of an asset or portfolio over a given investment period. It is caculated as: HPR = (Ending price - Beginning price + Dividends) / Beginning Price. Holding period return is a simple measure over a single period.

Problems with Holding Period Return - HPR

HPR does not take into account reinvestment income between the time dividends are paid and the end of the holding period.


Assume you purchase 1 share of Company Z today for $100, which does not pay dividends. In one year, you sell your share for $125. In this case, your holding period return is simply 25%.

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