Return calculator
Eighty percent over eight years and thirty percent over two are hard to compare in your head. This turns both into one number per year, which is the only fair way to line them up.
Return
- Return per year
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- Gain
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- Total return
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How to use it
Type what you paid, what it is worth now and how long you held it. The result is the yearly return, the rate that would have taken the first number to the second in a straight line. Deposits made along the way are not part of it, so use this for a position you bought once.
An example
Marek bought for 10,000 euro and the position stands at 18,000 after 10 years. Total that is 80 percent, which sounds strong. Per year it is 6.1 percent, which is a normal decade for a broad index fund.
What the result leaves out
A yearly return smooths everything that happened in between. Two positions with the same number can have felt completely different, and the one that fell 50 percent in the middle is the one most people sell.
Questions people ask
Because the gain compounds. Eighty percent over ten years divided out gives 8 percent a year, but 8 percent compounded for ten years is 116 percent. The correct answer is 6.1.
No. Deposits and withdrawals need a money weighted return, which asks when each payment landed. Use this one for a single buy that you left alone.
Only if you count them in the value today. Add the dividends you received to the current value, otherwise the result understates what the position actually did.