Math for trading/investing conversion?

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  • Thread starter Thread starter oweaponx
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SUMMARY

This discussion focuses on calculating the equivalent value of fractional investments in real estate investment trusts (REITs) or funds. The example provided illustrates how to determine the value of a $20 investment in a $7,000 asset as it fluctuates in price. Specifically, when the asset rises to $7,500, the value of the investment increases to approximately $21.43, and when it drops to $7,250, the value adjusts to about $20.71. This method of calculation is essential for investors looking to understand the impact of price changes on fractional investments.

PREREQUISITES
  • Understanding of fractional investing
  • Basic knowledge of real estate investment trusts (REITs)
  • Familiarity with investment valuation techniques
  • Ability to perform basic arithmetic operations
NEXT STEPS
  • Research methods for calculating fractional ownership in investments
  • Learn about the valuation of REITs and their market fluctuations
  • Explore investment strategies for small-scale investors
  • Study the impact of market trends on investment returns
USEFUL FOR

Investors, financial analysts, and anyone interested in understanding fractional investments in REITs or similar funds.

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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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 \frac{20}{7000}= \frac{2}{700}. So when it goes up to 7500 your share is \frac{2}{700}(7500) or 21.43. If it then goes down to 7250 your share is \frac{2}{700}(7250) or 20.71.
 

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