Term
Absolute vs. percentage gain
The absolute gain is how much money you made; the percentage gain is that amount divided by what you put in. They answer different questions: the first says how much, the second how well. When people start with different amounts, the two can rank them in opposite order.
In pesos: Making $500 MXN on $1,000 is a 50% gain; making $2,000 on $100,000 is only 2%. In absolute terms the second one wins; in percentage terms, the first.
Where to go deeper
1/2 6 min Read 3 common mistakes when you start investing Saving and investing do different jobs. Here's the order that works, and the signal that tells you you're ready to start investing.More terms on the same topic
Educational content only: not financial, investment or tax advice. The numbers are examples to understand the idea, not a forecast or a recommendation.