Calculating True Stock Returns

Total stock return has three components: price appreciation, dividends, and the drag of transaction costs. Most investors track only the price change, which can overstate results dramatically for small, frequently traded positions. This calculator nets buy and sell commissions and adds dividends to produce the true total return.

ROI vs Annualized Return

ROI answers "how much did I make on my money?" Annualized return answers "how fast did it grow per year?" They diverge with time: a 100% gain over 5 years is a modest 14.9% per year, while the same gain in 1 year is exceptional. Use annualized return to compare investments held for different periods.

Benchmark Your Performance

Compare your annualized return against the S&P 500's long-run average of roughly 10% (before inflation). Beating the market is the exception, not the rule — most active traders underperform. If your strategy can't clear the index after costs, low-cost index funds remain the rational default.