Percentage Return Calculator
Calculate the percentage return on your investment to measure performance. This calculator shows both the percentage gain/loss and the total return including dividends or additional contributions.
Percentage Return Results
Return Breakdown
Return Benchmarks
S&P 500 Average: 10% annually
Bonds (10-year): 4-5% annually
Savings Account: 1-2% annually
Note: Past performance not indicative
Understanding Percentage Returns
Percentage return measures the gain or loss on an investment relative to the amount invested. It's a standardized way to compare the performance of different investments regardless of their size.
Percentage Return Formula
The basic percentage return is calculated as:
Return % = [(Final Value - Initial Value) ÷ Initial Value] × 100
For investments with additional contributions, use total return calculation
Types of Returns
- Capital Return: Gain/loss from price appreciation
- Income Return: Dividends, interest, or rental income
- Total Return: Combination of capital and income returns
- Annualized Return: Average annual return over a period
- Real Return: Return adjusted for inflation
Interpreting Returns
| Return Range | Performance Level | Investment Type |
|---|---|---|
| > 15% | Excellent | High-growth stocks |
| 10-15% | Very Good | Growth stocks |
| 5-10% | Good | Balanced portfolios |
| 1-5% | Fair | Conservative investments |
| < 1% | Poor | Cash equivalents |
| < 0% | Loss | Underperforming assets |
Total Return vs. Price Return
Total return includes both price appreciation and income (dividends, interest), while price return only considers capital gains/losses.
- Price Return: (Ending Price - Beginning Price) ÷ Beginning Price
- Dividend Yield: Annual Dividends ÷ Stock Price
- Total Return: Price Return + Dividend Yield + Capital Gains
- Impact: Dividends can significantly boost total returns
Time-Weighted vs. Money-Weighted Returns
- Time-Weighted: Measures investment performance regardless of cash flows
- Money-Weighted: Considers timing and amount of cash flows
- Best Use: Time-weighted for comparing managers, money-weighted for personal returns
- Calculation: Time-weighted uses geometric linking, money-weighted uses IRR
Risk-Adjusted Returns
Raw percentage returns don't account for risk. Risk-adjusted measures provide a better comparison of performance relative to volatility.
- Sharpe Ratio: Return per unit of total risk
- Sortino Ratio: Return per unit of downside risk
- Alpha: Excess return over benchmark
- Information Ratio: Active return per unit of tracking error
Common Pitfalls
- Time Period Bias: Short-term results may not reflect long-term performance
- Market Conditions: Bull markets inflate returns, bear markets depress them
- Survivorship Bias: Only successful investments are considered
- Fees and Taxes: Not included in raw return calculations
- Inflation: Purchasing power may decline despite positive nominal returns
Applications
- Performance Measurement: Track investment results over time
- Portfolio Comparison: Compare different investment options
- Goal Tracking: Monitor progress toward financial objectives
- Manager Evaluation: Assess fund manager performance
- Tax Reporting: Calculate capital gains and losses
Tip: Percentage returns provide a standardized way to compare investments, but always consider the time period, risk level, and whether you're looking at price return or total return. For long-term investing, focus on total returns that include dividends and other income.