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Total Return Formula:
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Total Return Percentage measures the overall performance of an investment, including both capital appreciation and income generated. It provides a comprehensive view of investment profitability over a specific period.
The calculator uses the Total Return formula:
Where:
Explanation: This formula captures both the capital gains (price appreciation) and income components of investment returns, providing a complete performance picture.
Details: Total Return is crucial for evaluating investment performance, comparing different investments, and making informed portfolio decisions. It accounts for all sources of return, not just price changes.
Tips: Enter all values in USD. Beginning Value must be greater than zero. Include all income received during the investment period (dividends, interest, distributions).
Q1: What's the difference between total return and price return?
A: Price return only considers capital appreciation, while total return includes both capital gains and income from the investment.
Q2: Should I include reinvested dividends?
A: Yes, reinvested dividends should be included in either the Ending Value or Income calculation for accurate total return measurement.
Q3: What time period should I use?
A: Use consistent time periods (e.g., 1 year, 5 years) when comparing different investments or tracking performance over time.
Q4: How does total return help with investment decisions?
A: It provides a complete performance metric, helping investors choose between investments that may have different income and growth characteristics.
Q5: Can total return be negative?
A: Yes, if the investment loses value and the income received doesn't compensate for the loss, total return can be negative.