How to Measure Investment Returns

Investing for the future is important, but it is not enough to simply buy a stock or a mutual fund and forget about it. To make the most of your money you need to periodically evaluate your returns and determine how you are doing compared to the market as a whole. Once you know how each investment is doing, you will be better prepared to focus on your winning investments and trim your losing selections.

Step 1

Gather all of your investment statements and sort them according to investment company. Go through each set of statements and sort them by date.

Step 2

Locate the latest statement from each of your accounts. Then find the statement for the same investment a year ago.

Step 3

Add any subsequent investments you made during the year to the previous balance. Also add your investment expenses, dividend reinvestments, capital gains and other investment returns. Add that total to your starting balance to get your cost basis.

Step 4

Subtract the cost basis you calculated in step 3 from the current value as shown on your latest account statement. This is the total gain on your account.

Step 5

Divide the gain from step 4 by the cost basis of the account, then multiply that result by 100 to get the result in percentage terms. For example, if your cost basis was $100,000 and the current value is $105,000, your return for the time period is 5 percent.