How to figure your investment return

March 21, 2008

I invested $10,000 in three stocks about a year ago. Is there an easy way to figure my return so far without investment tracking software?

I invested $10,000 in three stocks about a year ago. Is there an easy way to figure my return so far without investment tracking software?

You can get a rough estimate by using a relatively simple formula, according to the American Association of Individual Investors. To illustrate the calculation, let's assume the current value of your stocks is $13,500 and you received $150 in dividends that weren't reinvested. During the year, you invested an additional $1,000 in the same three stocks.

Start with the current total value of your stocks and add the unreinvested dividends ($13,500 + $150 = $13,650). Then subtract half of the net additions you made during the year-the extra amounts invested minus the amounts received for any stock shares you sold. In this case you didn't sell anything, so the calculation is simply $13,650 – $500 = $13,150. Jot down this first result. Now take the amount you initially invested and add half your net additions ($10,000 + $500 = $10,500). Next, divide the first result by the second ($13,150 / $10,500 = 1.25). Subtract 1.00 from your answer, then multiply by 100 to figure your return as a percentage (1.25 – 1.00 = 0.25, which is 25 percent). Although the calculation ignores variables such as investment costs and the timing of purchases and sales, it can still give you a good sense of how well your investments are performing.