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Investment Return
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Investment return is the change in value of the investment over a given period of time and is normally expressed as a percent. For example, “the stock in IBM had an investment return of 5% for the year”. Investment return is measured many different ways for different purposes. After-tax investment return is a way to compare the returns on stocks and tax-free bonds directly. Risk adjusted investment return measures or compares investment return performance under different market conditions. Investment return if often expressed as an annual measure, but be careful you are not looking at a five-year investment return quote or a monthly investment return when comparing different investments. Investment return for the same time period lets investors compare the results of investing in a stock or bond with the results for a fund or a real estate deal. Nominal and real investment return are the non-adjusted and inflation-adjusted comparisons. Because objectives of lending or investing are accumulation of wealth, which itself depends on investment return, risk assumed, amount spent, and length of investment period all play a role in determining investment return. A number of online investment return calculators are available to investors who want to forecast or plan suitable investment return.
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