Abnormal Return

Abnormal Return - An abnormal return, when it is more, yields an excellent return on a stock or your entire portfolio, as you are making more on your return than the stock market you have invested in is, over the same period. An example: A stock in your portfolio makes a 10% return, but the stock market is only making 6% over the same period; therefore, you would receive an abnormal return of 4% more on your portfolio. But, when the abnormal return is less, the opposite occurs and you are making less than the stock market, you have invested in, over the same period, and generally means a stock or your entire portfolio is not providing you with as much of a return on your investment, which generally makes investors weep.