1. What Is Monthly Return?

Monthly Return is a financial metric that measures the percentage change in the value of an investment over a one-month period. It helps investors track performance and make informed decisions about their portfolios.

2. How Does The Calculator Work?

The calculator uses the monthly return formula:

Where:

• \( \text{End Value} \) — The value at the end of the month
• \( \text{Start Value} \) — The value at the beginning of the month

Explanation: This formula calculates the percentage change in value over the month, providing a standardized way to compare performance across different investments.

3. Importance Of Monthly Return Calculation

Details: Monthly return calculation is essential for portfolio management, performance tracking, risk assessment, and investment strategy adjustments. It allows investors to monitor short-term performance trends.

4. Using The Calculator

Tips: Enter the starting value and ending value in dollars. Both values must be positive numbers. The calculator will automatically compute the monthly return percentage and the absolute gain/loss amount.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a good monthly return?
A: This varies by asset class and market conditions. Generally, consistent positive returns above market benchmarks are considered good, but risk tolerance should also be considered.

Q2: How is monthly return different from annual return?
A: Monthly return measures performance over one month, while annual return measures over one year. Monthly returns can be annualized to estimate yearly performance.

Q3: Should dividends be included in the calculation?
A: For total return calculations, yes. Include both price appreciation and any dividends or distributions received during the month.

Q4: Can monthly return be negative?
A: Yes, if the ending value is less than the starting value, the monthly return will be negative, indicating a loss for that period.

Q5: How often should I calculate monthly returns?
A: Typically calculated at the end of each calendar month for consistent period-to-period comparison and performance tracking.