How to use it
- Use the formula below with your own figures.
The formula
Total return = income + price change.
Worked example
A stock up 8% that also pays a 2% dividend returned 10%.
Frequently asked questions
Price vs total return?
Total return adds income to price change.
Before or after tax?
State which for fair comparison.
Tips
- Time in the market beats timing the market.
- Reinvest returns to let compounding work.
- Keep fees low — they compound against you.
Key terms
- Compounding
- Earning returns on past returns.
- CAGR
- The smoothed annual growth rate.
- Yield
- Income as a percent of price.