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This shows you the differences between two versions of the page.

--- initial_investment [2025/07/13 00:26] – created xiaoer
+++ initial_investment [2025/07/13 00:27] (current) – xiaoer
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 The initial investment is the 'I' in some of the most important investment formulas. For example, the basic formula for [[Return on Investment (ROI)]] is:
 //ROI = (Net Profit / Initial Investment) x 100%//
-If you underestimate your initial investment by ignoring fees, you will artificially inflate your expected ROI, giving you a dangerously optimistic view of the investment's potential. This figure is also the starting point (the big negative number) in more sophisticated valuation methods like [[Net Present Value (NPV)]] and [[Internal Rate of Return (IRR)], which are used to evaluate the long-term profitability of a project.
+If you underestimate your initial investment by ignoring fees, you will artificially inflate your expected ROI, giving you a dangerously optimistic view of the investment's potential. This figure is also the starting point (the big negative number) in more sophisticated valuation methods like [[Net Present Value (NPV)]] and [[Internal Rate of Return (IRR)]], which are used to evaluate the long-term profitability of a project.
 ==== A Value Investor's Perspective ====
 Value investors are detectives looking for a bargain. Their entire process revolves around calculating the [[intrinsic value]] of an asset and buying it for a significantly lower price—a concept known as the [[margin of safety]].