Trading activity versus return: compare two fictional trade journals

Two people follow the same model price

Both begin with SEK 2,000 and zero shares. The share price is exactly 50 at every model trade and at ending valuation. Every completed trade has a separate fictional fee of SEK 5. There is no spread, tax, dividend, outside deposit or other cost. These amounts are not an Investiq or broker price list.

The quiet journal buys ten shares once. The active journal buys ten, sells ten, buys ten and sells ten. Trades are recorded immediately and no borrowing occurs. Allow 20 minutes: one person tracks cash and holdings, while the other counts completed trades and records the fees rather than assuming that activity measures success.

If the table does not fit, scroll it sideways.

Record every fee when it occurs

One purchase costs 10 × 50 + 5 = SEK 505. The quiet journal then has cash of 1,495 and ten shares worth 500 at the end, totalling 1,995. Account result is −SEK 5, or −0.25 percent of the starting 2,000. An unchanged price does not make this transaction free under the stated rules.

The active journal’s cash follows 2,000 → 1,495 → 1,990 → 1,485 → 1,980. Each sale brings 500 less the fee of 5, a net receipt of 495. No shares remain at the end. Total is 1,980 and result is −SEK 20, or −1 percent. All four fees must appear in the cash register.

Trade amount is not money created

Here we define summed trade amounts as the sum of quantity times price for every trade, before fees. The active journal has four times 500 = SEK 2,000 in this activity measure. The same capital has been reused following sales. Trading 2,000 does not mean profit of 2,000 or an additional deposit.

This is not a universal definition of a fund’s annual portfolio turnover. Our measure is explicit and concerns this trade list. Investor.gov distinguishes transaction fees from other costs; only the supplied transaction fees are present here. Different prices could also change the price result, so this experiment does not establish the outcome of all active trading.

Write only the conclusion supported by the inputs

A supported conclusion is that the more active journal in this fixed-price exercise pays more fees and ends SEK 15 lower. The exercise establishes neither participants’ real skill nor the next price. Ask the checking person to identify an unsupported statement, such as claiming that four completed trades automatically mean four successful investment decisions.

Use the manual practice journal to retain calculations and Investiq’s portfolio guide for the product connection. This worksheet promises no particular fee model, activity report or automatic comparison in the app. You can review reasoning on paper already: correct cash balances, a clearly defined measure and a conclusion that applies to the rules actually supplied.