Question
I have a project where I need to compose a small portfolio of stocks based on a 5 year time horizon. I must be able
I have a project where I need to compose a small portfolio of stocks based on a 5 year time horizon.
I must be able to show expected and required return, and the [expected] ending value of the investment after the 5 year period.
- How can I calculate the expected returns for five years? I only know how to do them for one year. Yahoo Finance provides the table below. Can I use the "Next 5 Years (per annum)" as a reference for expected return? Is the 64.35% number for each year, or is it the total for all five?
Growth Estimates | TMUS | Industry | Sector(s) | S&P 500 |
---|---|---|---|---|
Current Qtr. | 163.20% | N/A | N/A | N/A |
Next Qtr. | 1,955.60% | N/A | N/A | N/A |
Current Year | 233.50% | N/A | N/A | N/A |
Next Year | 39.70% | N/A | N/A | N/A |
Next 5 Years (per annum) | 64.35% | N/A | N/A | N/A |
Past 5 Years (per annum) | -9.90% |
I used this number originally, and for equal weights of eight investments (AMN, DDOG, HUM, LLY, MSFT, TMUS, UNH & VOD) comprising 60% of an investment portfolio I got an annual return of 25.11% which seems impossible. Attached below is my table of calculations. Any advice on how to do this properly would be much appreciated.
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