Investments Portfolio
Total Portfolio Summary
*Calculated using total return and capital-weighted average duration.
Understanding ROI and CAGR
Return on Investment (ROI) is a straightforward metric used to evaluate the efficiency or profitability of an investment. It measures the total return relative to the investment's cost. However, ROI doesn't account for the time you held the investment.
Compound Annual Growth Rate (CAGR) solves this by showing the mean annual growth rate of an investment over a specified period of time longer than one year. It assumes that any growth is compounded over that time. CAGR is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time.
How to Use This Calculator
- Enter Initial Investment: The total amount of money you originally invested.
- Enter Final Value: The current value of your investment, or the amount you received when you sold it.
- Enter Years Held: The exact duration you held the investment. For partial years, use decimals (e.g., 2.5 for two and a half years).
- Add Multiple Assets: Click "+ Add Another Investment" to build a portfolio. The calculator will automatically determine your total overall return and a weighted portfolio CAGR.
Why Both Metrics Matter
If an investment grew from $10,000 to $15,000, your ROI is 50%. If it took you 1 year to make that return, your CAGR is also 50%. But if it took you 10 years to make that same return, your annualized CAGR is only 4.14%.
Using both metrics gives you a complete picture: ROI tells you how much absolute money you made relative to your starting capital, while CAGR tells you how efficiently your money grew over time, allowing you to fairly compare it against benchmarks like the stock market or savings accounts.