1. What Is Monthly Stock Return?

Monthly stock return measures the percentage gain or loss on a stock investment over a one-month period, including both price appreciation and dividend income. It provides investors with a standardized way to compare performance across different stocks and time periods.

2. How Does The Calculator Work?

The calculator uses the monthly return formula:

Where:

• \( \text{End Price} \) — Stock price at the end of the month ($)
• \( \text{Start Price} \) — Stock price at the beginning of the month ($)
• \( \text{Dividends} \) — Total dividends received during the month ($)

Explanation: This formula captures both capital gains (price appreciation) and income (dividends) to provide a comprehensive measure of investment performance over the monthly period.

3. Importance Of Monthly Return Calculation

Details: Monthly returns are essential for performance tracking, portfolio analysis, risk assessment, and investment decision-making. They help investors identify trends, compare investments, and make informed buy/sell decisions.

4. Using The Calculator

Tips: Enter the stock price at the beginning of the month, the price at the end of the month, and any dividends received during that period. All values must be positive numbers, with start price greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: Why include dividends in the calculation?
A: Dividends represent actual cash returns to investors and are an important component of total return. Excluding them would understate the true performance of dividend-paying stocks.

Q2: What is a good monthly return?
A: This varies by market conditions and investment strategy. Historically, the S&P 500 has averaged about 0.9% monthly return, but individual stocks can vary significantly.

Q3: Should I use adjusted closing prices?
A: Yes, using adjusted closing prices (which account for stock splits, dividends, and corporate actions) provides the most accurate calculation of total return.

Q4: How does this differ from annualized return?
A: Monthly return shows performance for one month only. Annualized return projects what the return would be if compounded over a full year, providing better comparison across different time periods.

Q5: Can negative returns occur?
A: Yes, if the end price plus dividends is less than the start price, the monthly return will be negative, indicating a loss for that period.