ROI Calculator for Stock Investments
Understanding the Return on Investment (ROI) for your stock market plays is crucial for making informed financial decisions. ROI measures the profitability of an investment relative to its cost. It's a straightforward way to gauge how well your stocks have performed.
How to Interpret Your ROI
The ROI is expressed as a percentage and tells you how much profit you've made (or lost) for every dollar invested. A positive ROI indicates a profitable investment, while a negative ROI signifies a loss.
Formula: ROI = ((Current Value – Initial Investment – Additional Contributions + Withdrawals) / (Initial Investment + Additional Contributions)) * 100
Example: If you initially invested $1,000, added $200 over time, and your investment is now worth $1,500, and you withdrew $50, your calculation would be:
Profit: $1,500 (Current Value) – $1,000 (Initial Investment) – $200 (Contributions) + $50 (Withdrawals) = $350
Total Invested Capital: $1,000 (Initial) + $200 (Contributions) = $1,200
ROI: ($350 / $1,200) * 100 = 29.17%
This means your investment has generated a 29.17% return relative to the total capital you've put into it.