📊Investment Return Calculator
Calculate your investment returns including total return, CAGR, real returns, and compare performance against market benchmarks like the S&P 500.
Frequently Asked Questions
What's the difference between total return and annualized return?
Total return is the overall percentage gain/loss over the entire period. If you invest $10,000 and it grows to $15,000, your total return is 50%. Annualized return (CAGR) converts this to a per-year average that accounts for compounding. That 50% over 5 years equals about 8.45% annualized. Annualized returns are better for comparing investments over different time periods. A 50% return in 2 years (22.5% annualized) is better than 50% in 10 years (4.14% annualized).
What's a good investment return rate?
The S&P 500 has averaged about 10% annually over the long term (since 1926), making this a common benchmark. Returns of 15%+ annually are excellent (Warren Buffett averaged 20%). 7-10% is good for diversified portfolios. 5-7% is average. Below 5% is underperforming (you might do better in bonds or index funds). However, past performance doesn't guarantee future results, and higher returns usually mean higher risk. Also consider risk-adjusted returns - a volatile 12% may be worse than a steady 9%.
How do I calculate my investment return if I made regular contributions?
With regular contributions, use the money-weighted return (MWR) or internal rate of return (IRR), which accounts for the timing and size of cash flows. This differs from time-weighted return (TWR), which measures investment performance independent of cash flows. For example, if you invested $10,000 initially, added $500/month for 5 years, and ended with $50,000, your TWR might be 8% but MWR could be 7.5% because contributions dilute percentage gains. Use this calculator's MWR figure for the most accurate picture.
Should I compare my returns to the S&P 500?
Yes, the S&P 500 is the standard benchmark for US stock market performance. If your portfolio returned 7% while the S&P 500 returned 10%, you underperformed by 3 percentage points. However, context matters: (1) If your portfolio is lower risk (more bonds), expect lower returns. (2) During bull markets, active stock pickers often underperform the index. (3) Consider risk-adjusted returns - if you achieved 9% with half the volatility of the S&P 500's 10%, that's arguably better. Most investors (80%+) can't consistently beat the S&P 500, which is why index fund investing is popular.
What's the difference between nominal and real returns?
Nominal return is the percentage gain without adjusting for inflation. Real return subtracts inflation to show your true purchasing power increase. If your investment returned 8% but inflation was 3%, your real return is about 5%. Over 20 years, this difference is huge: $10,000 at 8% nominal becomes $46,610, but inflation means it only buys what $25,642 would have bought initially. Always consider real returns for long-term planning. Historical US stock market real returns average about 7% (10% nominal - 3% inflation). In high-inflation periods like 2022-2023, many investors had negative real returns despite positive nominal gains.
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Financial Disclaimer
This calculator is provided for educational and informational purposes only. The results are estimates based on the information you provide and should not be considered as financial, legal, or tax advice.
Actual results may vary based on your specific circumstances, market conditions, and other factors. Always consult with qualified financial, legal, and tax professionals before making any financial decisions.
We make no guarantees about the accuracy, completeness, or reliability of the calculations. Use this tool at your own risk.