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Return is the result you achieve on an investment. It shows how much your investment has increased or decreased in value, usually expressed as a percentage. Return can consist of price gains, but also of income such as dividends or interest.
Return is usually calculated as a percentage of your original investment.
When you invest, the value of your investment changes over time. The difference between your starting value and your ending value is your profit or loss. By dividing this difference by your original investment, you calculate the return as a percentage. This makes it possible to compare different investments.
Return can be positive when you make a profit, but also negative when the value decreases.
Short example:
Suppose you invest €1,000 in a share. After one year, the share is worth €1,080. You have made a profit of €80.
€80 divided by €1,000 is 0.08. This means a return of 8%.
If the value after one year is €920, you have made a loss of €80. €80 divided by €1,000 is 0.08. Your return is then -8%.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult a professional advisor when making financial decisions. The information and tips provided on this website are based on the personal insights and experience of our analysts and are intended for educational purposes only.
