You could be wondering, “How much will my investment be worth in 25 years?” Or you may be asking, “How much would $8,000 invested in the S&P 500 in 1980 be worth today?” As an investor, it’s essential that you ask as many questions as you can come up with, and find the right answers to them.
Luckily, the best stock websites out there do more than provide a trading platform for stock investors. The best stock sites also offer a knowledge base you can use to understand what calculations matter, your level of ownership in stock and how to estimate what your shares will be worth a few years from now.
Why Your Level of Stock Ownership Matters
A stock is a form of ownership in a company. But how much equity you have depends on how many company shares you buy. And the level of ownership will influence several things. Below are some of them:
- Dividends: The more shares you have, the more dividends you will get when the company distributes them since they are given on a per-share basis.
- Capital appreciation: If your shares rise in value, you can sell them. And the more shares you have, the more money you will make during the sale.
- Voting rights: Owners of common stock are allowed to vote on company issues and, thus, influence the company’s direction. So, the larger your share of company stock, the more meaningful your vote is. Generally, if you own 50 percent plus one voting share of a company, you will likely have controlling interest. And that will enable you to exercise control of the company and the moves it makes. So, you could influence who gets on the company’s board of directors and whether a third party acquires the company or not, among other things.
How to Calculate Your Stock Shares
You can determine their value if you know how much money you invested and what you paid for shares. Also, if you know how many shares you have and how much each is worth, you can calculate the total value of your shares based on the current market prices.
And using a share market calculator or investment calculator, you could estimate how much your shares would be worth in the future. In addition, you could determine your return on investment over time.
Calculating Number of Stock Shares
If you trade often or your company has issued and repurchased shares, the number of shares you own may change. As a result, you may not know how many shares you own.
However, you can determine how much of a company stock you own by looking through your stock brokerage statement or using your broker’s online platform. Usually, the report also shows how much you paid for the shares when you bought them.
And if you invest through multiple platforms, you have to search through all the brokerage account statements. Also, if you invest through a retirement plan, keep track of what you are investing so you can know what you own.
Once you have all the information, you can add up the number of individual company shares to determine the total number of shares you own in each company stock.
Alternatively, you can add up the total amount you have spent on each company stock, divide it by the current market price per share and estimate how many shares you own.
Calculating Based on Investment Amount
Below are the steps you can take to determine how many shares you will get when you invest a specified amount of money.
- Start by setting aside the money you want to invest.
- Choose a company stock you want to invest in. Check out its ticker symbol, which identifies publicly traded companies on specific stock exchanges. Sites like MarketWatch have search tools to help you find company stock symbols.
- Using the ticker symbol or company name, search for the current value of one share in the market.
- Based on the investment amount you have and intend to use, you can calculate the number of shares you can buy. You will do that by dividing the total investment amount by the current share price. For example, if you have invested $5,000 to buy company ABC’s stock with a current value of $40, you will receive $5,000/$40 = 125 shares.
Calculating Total Share Value
You can also calculate the total value of your shares today. Here’s how:
- First, you need to identify the different company stocks you have and their ticker symbols.
- Check the current market prices per share of each company stock based on their stock symbols.
- Multiply the number of shares you own by the current share price for each stock. That represents how much money you could make if you were to sell your stock now. For example, if you own 1,000 shares of company XYZ valued at $15 and 550 shares of company PQR valued at $22, all your shares will have a total value of (1,000 x 15) + (550 x 22). So, if you were to sell all your shares in the two stocks, you would have $27,100 after the sale, assuming no fees or taxes.
Once you know how many shares you can get for your money, you can determine your company ownership level. And you can do that by finding the company’s balance sheets and checking out the stockholder’s equity section. Based on the available information, you can compare your total number of shares to the outstanding shares. The latter will help you know just how much say you have as a shareholder.
Also, you can estimate your average rate of return by subtracting your original total investment amount from the current total share value, dividing it by the original investment amount and multiplying it by 100 percent.
I hold a BS in Computer Science and have been a freelance writer since 2011. When I am not writing, I enjoy reading, watching cooking and lifestyle shows, and fantasizing about world travels.