Calculate your investment returns, compound growth, and portfolio performance. Track your investment gains and plan for financial success.
Investment returns measure the performance of your investments over time. Understanding how to calculate and track returns is essential for building long-term wealth.
Simple Return: The basic percentage gain or loss on an investment over a specific period.
Compound Return: Returns that earn additional returns on previously earned returns, creating exponential growth.
Annualized Return: The average annual return over a multi-year period, accounting for compounding.
Time Value of Money: Money invested today is worth more than the same amount in the future due to earning potential.
Risk vs. Return: Generally, higher potential returns come with higher risk. Diversification helps manage risk.
Dollar-Cost Averaging: Regular investments over time can reduce the impact of market volatility.
A good annual return depends on your risk tolerance and investment goals. Historically, the stock market averages 7-10% annually, but this varies by time period and market conditions. Conservative investors might target 3-5%, while aggressive investors might aim for 10-15%.
Compound interest means you earn returns on both your original investment and on previously earned returns. Over time, this creates exponential growth. The longer you invest, the more powerful compound interest becomes.
Long-term investing generally provides better returns and reduces risk. Short-term market fluctuations are normal, but over decades, markets tend to trend upward. Focus on long-term goals and avoid making decisions based on short-term volatility.
