Dividends are one component of return. A price loss can be larger than the cash you received.
Follow the whole RM1,000
Suppose you buy 100 shares at RM10 with no fees, investing RM1,000. Over the holding period each share pays RM0.80 in net dividends, so you receive RM80. At the end the price is RM9 and the shares are worth RM900. If you kept the dividend as cash, the combined value is RM980. The investment lost RM20 despite paying a visible dividend.
Why 8% yield does not mean an 8% return
The RM80 dividend is 8% of the original RM1,000 cost. The price change is minus 10%. Together they give minus 2% for this period before other costs. A yield calculated using the ending RM9 price would be a different ratio again. Always label the denominator: purchase cost, current market value or a forward estimate. Do not compare differently defined percentages as if they measure the same outcome.
Use a simple total-return equation carefully
With one initial investment and no additional external cashflows, period return is (ending investment value + cash distributions kept outside it − initial cost) ÷ initial cost. Include purchase fees in the initial cost and subtract relevant selling charges if modeling a sale. This is a holding-period result. It is not automatically an annual rate, and it needs a different treatment when you add or withdraw money during the period.
| Component | Amount | Relative to RM1,000 cost |
|---|---|---|
| Price change | -RM100.00 | −10% |
| Net dividends | RM80.00 | +8% |
| Combined period result | -RM20.00 | −2% |
Reinvested dividends must not be counted twice
If the dividend bought additional shares, those shares are already included in the ending investment value. Adding the same dividend again as cash would inflate the return. Similarly, if your broker’s total account value already includes uninvested dividends in cash, do not add them to that account value a second time. Reconcile shares, cash and transactions before comparing a broker figure with a separate tracker.
Read DividenNote’s numbers for their stated purpose
A holding’s unrealised gain is a price-versus-cost measure; received dividends are a separate cash record. Neither number alone represents every cashflow in a multi-currency account. For a period review, preserve opening and closing values, external deposits and withdrawals, and the exchange-rate basis. The distinction helps explain differences without assuming the broker or the journal must be wrong.
Put it into practice
Use the simple ROI tool only when its inputs match the cashflow pattern. For multiple deposits on different dates, read the ROI/CAGR/XIRR guide before interpreting an annual rate.
Open the ROI calculator