How can I calculate the total return on my stock portfolio?

To calculate the total return on your stock portfolio, use this formula:

Total Portfolio Return = [(Ending Value - Initial Value) + Dividends] / Initial Value × 100

For example, if your portfolio starts at ₹1,00,000, grows to ₹1,50,000, and earns ₹5,000 in dividends, the return would be:

Total Portfolio Return = [(1,50,000 - 1,00,000) + 5,000] / 1,00,000 × 100 = 55%

This formula helps investors evaluate the overall performance of their investments.

1. What Is Total Portfolio Return?

Total portfolio return measures the overall profit from a combination of stocks, including capital gains (price appreciation) and dividends earned over time.

2. How to Calculate Total Portfolio Return?

Follow these steps:

• Step 1: Determine the initial investment value.
• Step 2: Find the current portfolio value.
• Step 3: Add total dividends received.
• Step 4: Apply the formula: (Ending Value - Initial Value + Dividends) / Initial Value × 100.
• Step 5: Evaluate the performance.

3. Factors Affecting Portfolio Returns

• Stock Selection: High-growth stocks boost returns.
• Dividends: Stocks with regular payouts increase total return.
• Market Trends: Economic conditions impact portfolio value.
• Diversification: A well-diversified portfolio reduces risk.

4. What Is a Good Portfolio Return?

Portfolio returns vary based on market conditions and investment strategy:

• 10%-15% Annually: Considered strong for long-term investors.
• 20%-30%: Possible with aggressive growth stocks.
• 50%+: Achievable in strong bull markets.

5. Conclusion

Knowing how to calculate total portfolio return helps investors track performance and make better financial decisions. A diversified strategy can maximize returns while reducing risk.