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Rule of 72 |
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Rule of 72An arithmetic equation used to calculate how many years it would take for an investment to double in value, given knowledge of its annual rate of return and reinvestment (compounding) of income.The rule says that if you divide the compound growth rate of any investment into 72, you get the approximate number of years it takes to double your money.BZW research shows that over the past 70 years the average return from shares was 12% p.a., from gilts it was 6% and from cash deposits it was 2%. Based on these figures, the Rule of 72 indicates:Shares: you double your money in 6 yearsGilts: you double your money in 12 yearsCash deposits: you double your money in 36 yearsOf course, in real life the performance of your investments will vary according to which particular investment you choose and the timing of your entry and exit.Rule of 72A formula used to determine the amount of time it will take for invested money to double at a given compound interest rate, which is 72 divided by the interest rate.Rule of 72 Similar MatchesIncome exclusion ruleIncome exclusion ruleThe IRS rule that excludes certain types of income from taxation, e.g., welfare payments. Origin ruleOrigin ruleSee rules of origin. Short sale ruleShort sale ruleAn SEC rule requiring that SEC be made only in a SEC that is moving upward; this means either on an SEC from the last sale, or showing no downward movement. Suitability rulesSuitability rulesPolicies and guidelines that brokers must use to ensure that investors have the financial means to assume risks that they wish to undertake. These are enforced by the NASD and other self-regulatory organizations. Rule 144Rule 144Restricts solicitation of buyers to complete the sell order of an insider (unless the firm is already a buyer); signified by a flashing "E" on Quotron. Further SuggestionsFriedman rulelisting rules Rule 14 d One share one vote rule Thirty day wash rule Rule 144a 20% cushion rule prudent man rule Ten Day Rule Administrative pricing rules Three steps and a stumble rule Variance rule Five percent rule Tick test rules Net present value rule the rule of twenty Rule lOb 5 48 hour rule Quote rule Rules-based trade policy Equal percentage contribution rule (EPCoR) Allocation of income rules Discounted payback period rule Rule of law Securities and Exchange Commission Rules |
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