Total Return
Candlefocus EditorTotal return is a combination of income, capital gains, and realized distributions. Income from investments can include interest from bonds, dividends from stocks, and other distributions from mutual funds and other types of investments. Capital gain or loss is the difference between the price an investor paid for a security and the price paid for the security at the end of the period. Realized distributions, which include gains or losses from the sale of investments, are included in the total return calculation.
The total return formula is calculated on a period basis, usually quarterly or annually, and is expressed as a percentage of the amount invested. It is important to note that some of the income earned may be taxable and should be factored into the total return calculation.
Understanding total return can help investors make informed investment decisions. With total return, investors can better assess their investments, taking into account all their income, capital gains, and realized distributions. Total return is an important tool that investors can use to measure the success of their investments over time.