Stock Return Calculator
Frequently Asked Questions
How do you calculate stock return?
Stock return is calculated as (sell price - buy price) x number of shares. The percentage return is (sell price - buy price) / buy price x 100. This gives you the total return over your holding period, not accounting for dividends, fees, or taxes.
What is CAGR (Compound Annual Growth Rate)?
CAGR is the annualized rate of return that smooths out volatility over a multi-year period. The formula is (ending value / beginning value)^(1/years) - 1. It allows you to compare investments held for different time periods on an equal basis by expressing all returns as an annual rate.
What is the difference between total return and annualized return?
Total return measures the overall percentage gain or loss over the entire holding period. Annualized return (CAGR) converts that into a per-year figure, making it easier to compare investments held for different lengths of time. A 100% total return over 10 years equals roughly 7.2% annualized.
Should dividends be included in stock return calculations?
Yes, for a complete picture of investment performance you should include dividends. Total return including dividends gives a more accurate measure of what you actually earned. This calculator focuses on price return only, so you would need to add any dividends received separately for a full total return figure.
What is a good annual return on stocks?
The historical average annual return of the S&P 500 is approximately 10% before inflation and about 7% after inflation. Returns above 10% annualized are considered strong, while consistent returns above 15% are exceptional. Individual stock returns vary widely and carry more risk than diversified index investing.
Calculating Stock Returns
This stock return calculator computes your total profit or loss, percentage return, and annualized return (CAGR) for any stock trade. Total return is simply (sell price - buy price) x shares. The annualized return uses the compound annual growth rate formula: CAGR = (ending value / beginning value)^(1/years) - 1, which normalizes returns across different holding periods for easy comparison. For example, a 50% total return over 5 years equates to roughly 8.4% annualized, while the same 50% over 2 years represents about 22.5% annualized. The "If you invested $1,000" scenario helps you quickly gauge the practical impact of a stock price movement on a standard investment amount.