I have the following stock gains and losses for a stock portfolio. Overall, the portfolio has lost $40 or 28%. But when I calculate weights based on market value, and then calculate the gain/loss based on those weights, I come up with an 8% gain.
My problem is how do I explain the $40 loss (-28%) on a non-weighted market value basis and the 8% gain on a weighted market value basis?
So far, I've just come up with this: The market value weights amplify gains or losses embedded in the total gain/loss. Since the total gain/loss has no weights, you don't see the weighted gain/loss.
But somehow this doesn't sound intuitive.
Furthermore, how do I explain the 8% gain? I understand the math that calculates it. But what is it 8% of?
Any help would be greatly appreciated
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