Total Return
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Annualized Return
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Profit / Loss
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When Should You Use This?
Use this to fairly compare investments with different holding periods. A 50% total return over 5 years is very different from 50% over 1 year. Annualized return normalizes everything to a per-year basis.
How It Works
1
Enter Values
Input what you started with and what you ended with, plus the number of years you held the investment.
2
Read Annual Return
This is your compound annual growth rate (CAGR). It accounts for compounding, unlike simple average returns.
3
Compare
S&P 500 long-term average is about 10% annualized. Beat that consistently and you're outperforming the market.
Frequently Asked Questions
That gives the simple average, which ignores compounding. A $100 investment that goes to $200 in 7 years has a 10.4% annualized return, not 14.3% (100%/7).
CAGR (Compound Annual Growth Rate) is the same as annualized return. It's the constant annual rate that would take you from start to end value.
Annualized return accounts for compounding and is always lower than the arithmetic average of annual returns (due to volatility drag).
Yes. Enter years as decimals: 6 months = 0.5 years, 18 months = 1.5 years. The formula works for any time period.
10% per year matches the S&P 500 long-term average. 15%+ is excellent. 20%+ consistently puts you in elite company (Buffett averaged about 20%).