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Stock Return Formula:
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Stock return measures the percentage gain or loss on an investment over a specific period, including both capital appreciation and dividend income. It provides investors with a standardized way to evaluate investment performance.
The calculator uses the stock return formula:
Where:
Explanation: This formula calculates the total return percentage, accounting for both price changes and dividend income received during the investment period.
Details: Calculating stock returns is essential for evaluating investment performance, comparing different investment opportunities, and making informed investment decisions based on historical returns.
Tips: Enter the initial investment value, current investment value, and total dividends received. All values must be in the same currency and positive numbers.
Q1: What is considered a good stock return?
A: A good return typically exceeds the market average (usually 7-10% annually for broad market indices) and outperforms inflation rates.
Q2: How does dividend reinvestment affect returns?
A: Reinvesting dividends can significantly boost total returns through compounding, especially over long investment periods.
Q3: Should I include transaction costs in the calculation?
A: For precise personal return calculations, it's recommended to include brokerage fees and other transaction costs in the begin value.
Q4: How does this differ from annualized return?
A: This calculates total return for the period. Annualized return adjusts for the investment period length to enable comparison across different time frames.
Q5: Can this formula be used for other investments?
A: Yes, this basic return calculation can be applied to any investment where you have a beginning value, ending value, and any income received.