Stocks & Investing

Return on Investment (ROI)

How much you made (or lost) on an investment, as a percentage of what you put in.

ROI is the simplest scorecard: gain divided by cost. It is quick and useful but ignores time, so a 50% ROI over one year is very different from 50% over ten. For time-aware comparisons, use CAGR instead.

For example

Put in $2,000, end with $2,300, and your ROI is 15% ($300 gain on $2,000).

Related terms

CAGR (Compound Annual Growth Rate)Capital Gains

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