Question 1

How do you calculate stock return?

Accepted Answer

Stock return is the profit or loss on a trade expressed as a percentage of what you invested. The formula is (sell price − buy price) ÷ buy price × 100, then you can multiply by the number of shares to get the dollar figure. If you bought at $50 and sold at $75, that's a 50% return per share; on 100 shares, a $2,500 profit. Include fees on both sides for a true net return, and always compare returns to the time horizon that produced them.

Question 2

What is a good annual stock return?

Accepted Answer

The S&P 500 has averaged roughly 10% per year over the long run including dividends, or about 7% after inflation. Anything meaningfully above that on an annualized basis and sustained across a decade or more is genuinely strong; anything below it is underperforming a plain index fund. Individual trades can produce wildly higher or lower returns, but the meaningful benchmark for a portfolio is the annualized return over a full market cycle, not a single lucky pick.

Question 3

How do I calculate return percentage on a stock trade?

Accepted Answer

Divide profit by total cost and multiply by 100. Profit is (sell price × shares − sell fees) − (buy price × shares + buy fees). Total cost is (buy price × shares + buy fees). A $500 profit on $2,000 invested is 25% return. Percentage return is essential for comparing trades of different sizes on equal footing — a $1,000 gain means very different things on a $5,000 position vs a $500,000 position.

Question 4

Does stock return include dividends?

Accepted Answer

Not by default in most calculators, including this one — the standard 'return' figure typically refers to price return only. Total return includes reinvested dividends and can be meaningfully higher for mature payers like Coca-Cola, Johnson & Johnson, or Realty Income. As a rough add-on, multiply the company's dividend yield by the number of years held and add that to the price return to approximate total return.

Question 5

How do taxes affect my stock returns?

Accepted Answer

In the US, gains on stocks held less than one year are taxed as short-term capital gains at your ordinary income rate (10–37%). Gains on positions held over a year qualify for lower long-term capital gains rates (0%, 15%, or 20% depending on income). That difference can shave 15–20 percentage points off your after-tax return on a big win. Positions inside 401(k)s and IRAs defer or eliminate that tax entirely, which is why account choice often matters more than trade selection.

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