What is an investment turnover?

Investment turnover is a type of evaluation that has been dealing with the purchase and sale of investment in the portfolio for a specified period of time. In many situations, this image reflects the frequency of purchasing and selling asset during the calendar year, although the calculation may include a shorter time. The idea of ​​determining investment turnover is to understand how often the assets are exchanged and what type of benefits is obtained compared to the cost of trading and mediation fees and the overall impact on the value of the investment portfolio.

There are several different ways to determine the turnover of investment in the portfolio. One approach includes focus on the overall value of the new securities that are purchased during the considered period, and then distribute this amount by the value of the portfolio itself. An alternative approach requires the identification of any securities of the Tklobouk is sold during the period and the sales prices associated with these assets. After a complete total amount of sale, this number can also be divided by a net valueportfolios to determine the ratio ratio of investment. From there, the investor can consider the result of the calculation and use this data to decide how to buy and sell securities in the future.

understanding the value of current investment strategies in terms of determining purchases and sale decisions is a key advantage of evaluating investment turnover. By assessing the impact that has the current approach to the purchase and sale of securities, it is possible to decide whether the current approach will move the investor closer to its goals. At the same time, the result may indicate that the investor may want to try a different approach to obtaining, holding and selling the assets if the numbers are not to his liking.

In fact, there is no ideal turnover ratio that would be the right approach to each investor. A ratio that would be quite acceptable to a conservative investor may be considered the failure of someone who is willing to risk dThe risks. The aim of calculating investment turnover is to find out whether the activity is in line with the investor's thinking and whether the purchasing and sales strategies used could be improved and increased benefits for this investor within the limits of their own investment preferences.