Compare up to three investments — stocks, ETFs, or a benchmark — over the same holding period. Enter what you actually paid and received (or hypothetical values).
📗 Investment 1
📘 Investment 2
📙 Investment 3 (optional)
How to Use the Stock Return Calculator
- Total Return tab. Enter your buy price, number of shares, holding period, any commissions paid, your sell price, total dividends received over the period, and your federal income tax bracket. The calculator computes your capital gain or loss, annualized return (CAGR), total pre-tax return, estimated tax owed (applying correct long-term or short-term capital gains rates), and after-tax return. It also notes how much you’d save by holding to the one-year threshold if you haven’t yet.
- Compare Investments tab. Enter a shared initial investment amount and holding period, then fill in buy price, sell price, dividends, and annual volatility for two or three investments. The comparison shows final value, total return, annualized CAGR, and a risk-adjusted Sharpe ratio for each — helping you evaluate which investment performed better on both raw returns and return per unit of risk.
- What-If Projector tab. Enter your current share price and position size (or dollar amount), your existing cost basis, and three annual return scenarios (bear, base, bull). Add a dividend yield to model reinvestment. The projector shows year-by-year values for all three scenarios with a bar chart comparison and insight on the spread between outcomes.
How Stock Returns Are Calculated
Total Return vs. Price Return
Price return measures only the change in share price — from buy to sell. Total return includes dividends, which can account for a significant portion of long-term investment gains. The S&P 500’s historical price return is roughly 7% annualized; its total return including dividends is closer to 10%. For dividend-paying stocks and ETFs, failing to account for dividends substantially understates your actual investment performance. This calculator uses total return — capital gain plus dividends — as its primary metric.
Annualized Return (CAGR)
Annualized return, also called the Compound Annual Growth Rate, converts a multi-year total return into a consistent annual percentage. A 50% total return sounds impressive, but means very different things depending on whether it took 2 years (21.5% annualized) or 10 years (4.1% annualized). CAGR is the standard for comparing investments held over different periods. The formula is: CAGR = (End Value / Beginning Value)^(1/Years) − 1. This calculator uses CAGR as the primary annualized return metric for all three modes.
Capital Gains Tax: Short-Term vs. Long-Term
| Holding Period | Tax Treatment | 2026 Rate (22% bracket) | 2026 Rate (37% bracket) |
|---|---|---|---|
| Under 1 year | Short-term capital gains | 22% (ordinary income) | 37% (ordinary income) |
| 1 year or more | Long-term capital gains | 15% | 20% + 3.8% NIIT |
The difference between short-term and long-term treatment can be dramatic. On a $20,000 gain in the 32% bracket, the difference is $20,000 × (32% − 15%) = $3,400 in additional tax — avoided entirely by holding one day longer than 12 months. The Net Investment Income Tax (NIIT) of 3.8% applies to investment income for taxpayers with modified AGI above $200,000 (single) or $250,000 (married filing jointly) in 2026.
Risk-Adjusted Returns and the Sharpe Ratio
Raw return comparisons can be misleading. A stock that returned 30% with extreme volatility isn’t necessarily a better investment than one that returned 20% with smooth, steady gains — because the high-volatility stock required you to tolerate much larger drawdowns along the way. The Sharpe ratio normalizes return by risk: (Investment Return − Risk-Free Rate) ÷ Volatility. A higher Sharpe ratio means more return per unit of risk. This calculator uses a 4% risk-free rate (approximate 2026 Treasury yield) for the Sharpe calculation. Anything above 1.0 is generally considered good; above 2.0 is excellent.
Frequently Asked Questions
What’s the difference between realized and unrealized gains?
An unrealized gain (or “paper gain”) is the profit on shares you still own — the difference between your current market value and your cost basis. A realized gain is the profit you’ve actually locked in by selling. Only realized gains are taxable in the year they occur (with some exceptions). The Total Return calculator computes realized gains on a completed sale. The What-If Projector shows unrealized gains — the potential profit if you sell at a projected future price.
How do I find my cost basis?
Your brokerage is required to track and report cost basis for shares purchased after 2011 (equities) or 2012 (mutual funds). Check your brokerage’s “Cost Basis” or “Tax Lots” section — it should show the price you paid for each purchase. For older shares or inherited shares, you may need to look up historical prices or consult a tax professional. For inherited shares, the cost basis is typically “stepped up” to the fair market value on the date of the original owner’s death.
Does this calculator account for stock splits?
No — enter your split-adjusted buy and sell prices and share counts. If you bought 100 shares at $300 and the stock executed a 3-for-1 split, you now have 300 shares with a split-adjusted cost basis of $100 each. Most financial data sources and brokerage platforms show split-adjusted historical prices automatically. Use those adjusted prices in the calculator rather than the original prices.
What is a good annualized return?
The S&P 500 has delivered approximately 10% annualized total returns over long periods (and 7% after inflation). Consistently beating this benchmark is difficult even for professional fund managers — the majority of actively managed funds underperform the S&P 500 over 10+ year periods. A 7–10% annualized return on a diversified portfolio is considered strong for a long-term investor. Individual stocks can produce much higher or lower returns, with correspondingly higher volatility. For context: 15% annualized doubles money every 4.8 years; 10% doubles every 7.2 years; 7% doubles every 10.3 years.
How do dividends affect my cost basis?
Cash dividends received don’t change your cost basis — they’re income you receive separately. However, if you participate in a Dividend Reinvestment Plan (DRIP) and use dividends to buy additional shares, each reinvestment purchase creates a new tax lot with its own cost basis equal to the price paid. Your brokerage tracks DRIP purchases automatically. Over time, DRIP investors accumulate many small tax lots at different prices — your brokerage statement should aggregate these into a single average cost basis per share.
What are qualified dividends and how are they taxed?
Qualified dividends are dividends from U.S. corporations (and some foreign companies) that meet IRS holding period requirements — generally, you must hold the stock for more than 60 days during the 121-day period surrounding the ex-dividend date. Qualified dividends are taxed at the lower long-term capital gains rate (0%, 15%, or 20% depending on income). Ordinary (non-qualified) dividends are taxed at regular income tax rates. Most dividends from U.S. stocks and ETFs are qualified — your 1099-DIV from your brokerage will break this out.
💡 Tips for Evaluating and Improving Your Stock Returns
- Hold for at least one year before selling winners. The difference between short-term and long-term capital gains rates can be 7–22 percentage points depending on your bracket. For substantial gains, holding just past the one-year threshold can save thousands in taxes on the same return.
- Include dividends in every return calculation. Investors who track only price return systematically understate their actual performance. For ETFs and dividend-paying stocks, dividends can represent 20–40% of total return over long holding periods.
- Use tax-loss harvesting to offset gains. If you have losing positions, selling them in the same tax year as winning positions offsets capital gains dollar-for-dollar. You can immediately reinvest in a similar (but not identical) security to maintain market exposure — just wait 31 days to avoid the wash-sale rule.
- Compare to your benchmark before celebrating. A 15% return is excellent in a flat market and merely average in a year when the S&P 500 returned 25%. Always compare your investment returns to a relevant benchmark over the same period — the comparison tab makes this easy by entering an index fund alongside your individual stock picks.
- Factor in fees and commissions. Commission-free trading has largely eliminated per-trade fees, but expense ratios on ETFs and mutual funds are still a cost. A fund with a 0.03% expense ratio vs. 0.80% saves 0.77% per year — which compounds significantly over decades. Even small, ongoing costs reduce final wealth materially over 20–30 year horizons.
- Use the What-If Projector before buying. Running bear/base/bull scenarios before making an investment helps calibrate expectations and position sizing. If the bear case produces an outcome you’re not prepared to accept, that’s a signal to reduce position size — not a reason to assume the bear case won’t happen.