Capital Gains Yield Calculator
Calculate the capital gains yield of stocks and investments. Capital gains yield measures the price appreciation component of total return.
Capital Gains Yield Results
Stock Comparison
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Market Averages (2024)
S&P 500: 8-12% annual CGY
Growth Stocks: 15-25% annual CGY
Value Stocks: 5-10% annual CGY
Dividend Stocks: 3-8% annual CGY
Note: Historical averages, not predictions
Understanding Capital Gains Yield
Capital gains yield measures the price appreciation component of an investment's total return. It represents the percentage increase in the market price of a security over a specific period, excluding dividends or other income.
How Capital Gains Yield is Calculated
The capital gains yield formula is:
Capital Gains Yield = (Current Price - Initial Price) ÷ Initial Price
Expressed as a percentage: CGY × 100
Capital Gains Yield vs. Total Return
| Component | Capital Gains Yield | Dividend Yield | Total Return |
|---|---|---|---|
| What it measures | Price appreciation | Dividend income | Price appreciation + dividends |
| Example stock | $50 ? $65 (+30%) | $1.25 annual (2.5%) | 32.5% total return |
| Tax treatment | Capital gains tax | Dividend tax | Mixed tax treatment |
Why Capital Gains Yield Matters
- Growth Assessment: Measures pure price appreciation
- Investment Strategy: Helps identify growth vs. income investments
- Performance Analysis: Separates price changes from dividends
- Tax Planning: Different tax treatment than dividends
- Risk Evaluation: Higher CGY often indicates higher volatility
Factors Affecting Capital Gains Yield
- Company Performance: Earnings growth, market share, innovation
- Economic Conditions: GDP growth, interest rates, inflation
- Industry Trends: Sector performance and market cycles
- Market Sentiment: Investor confidence and risk appetite
- Company-Specific News: Product launches, acquisitions, scandals
Capital Gains Tax Considerations
Capital gains are taxed differently than ordinary income. The tax rate depends on how long you hold the investment and your income level.
- Short-term: Held = 1 year, taxed as ordinary income (up to 37%)
- Long-term: Held > 1 year, preferential rates (0-20%)
- Tax-loss harvesting: Use losses to offset gains
- Step-up in basis: Inherited assets get new basis
Using CGY in Investment Analysis
- Growth Stock Identification: High CGY indicates growth potential
- Portfolio Diversification: Balance growth and income investments
- Performance Benchmarking: Compare against market indices
- Risk Assessment: Higher CGY often correlates with higher risk
- Exit Strategy Planning: Consider tax implications of selling
Limitations of Capital Gains Yield
- Ignores Dividends: Doesn't show total return
- Short-term Focus: Can be volatile over short periods
- Market Timing Risk: Timing of measurement affects results
- Doesn't Account for Splits: Stock splits can distort CGY
- Currency Effects: Foreign investments may have currency impact
Tip: Capital gains yield helps you understand the growth component of your investments, but remember that total return includes both capital gains and dividends. Consider your investment goals, time horizon, and tax situation when evaluating CGY. Always consult with a financial advisor for personalized advice.