Math for trading/investing conversion?

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In summary, the conversation discusses how to set up investing in a REIT or fund by only buying a portion of the total amount. The example given is starting with $20 and how to calculate the equivalent share at different values, such as $7,500 and $7,250. The summary provides a calculation for determining the equivalent share in these scenarios.
  • #1
oweaponx
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Greetings, all. I’m not exactly sure how to word this, so hopefully this makes sense. I’m trying to figure out how to set this up, maybe a ration?

Let’s say I’m looking at a REIT, or maybe a fund. However, instead of buying the full amount of the item, I’m looking at a part.

To start, let’s say, to try and keep the numbers easy, that the item starts at \$7,000. Later, it rises to \$7,500. Still later, it drops to \$7,250.

Now, let’s say I’m using \$20, as my start. How do I know what my equivalent will be, at \$7,500. Then, as it drops, what will my equivalent be, when I want to sell. I’m also looking to do similar, with a start of \$50, and \$100, as examples.

I hope this has made sense, and I appreciate help!
 
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  • #2
I am not sure what you mean by "20 dollars, as my start". Do you mean investing just 20 instead of the full 7000? If so your share is [tex]\frac{20}{7000}= \frac{2}{700}[/tex]. So when it goes up to 7500 your share is [tex]\frac{2}{700}(7500)[/tex] or 21.43. If it then goes down to 7250 your share is [tex]\frac{2}{700}(7250)[/tex] or 20.71.
 

FAQ: Math for trading/investing conversion?

What is the importance of math in trading and investing?

Math is an essential tool in trading and investing as it helps in analyzing and interpreting market data, predicting future trends, and making informed decisions. It also helps in risk management and portfolio optimization.

What are some basic mathematical concepts used in trading and investing?

Some basic mathematical concepts used in trading and investing include arithmetic, algebra, statistics, and probability. These concepts are used to calculate returns, measure risk, and analyze market trends.

How can math be used to analyze stock performance?

Math can be used to analyze stock performance by calculating key metrics such as return on investment, volatility, and correlation. It can also be used to create charts and graphs to visualize stock performance over time.

Can math help in predicting stock prices?

While math can be used to analyze historical data and identify trends, it cannot accurately predict stock prices. This is because stock prices are affected by numerous factors, including market sentiment and external events, which cannot be accurately predicted using mathematical models.

How can math be used to manage risk in trading and investing?

Math can be used to manage risk in trading and investing by calculating risk metrics such as standard deviation and beta, which help in understanding the level of risk associated with a particular investment. It can also be used to diversify a portfolio and minimize risk through asset allocation strategies.

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