Investing term

What is Return?

The percentage change in the value of an investment over a period, usually a year.

Return is the percentage change in an investment's value over a period, usually a year, and it's how performance is measured and compared. A complete return includes both price change and any income like dividends or interest. It's always worth pairing return with the risk taken to earn it — a high return from a wild gamble isn't the same as a steady one.

For example

An investment that rises from $1,000 to $1,070 over a year delivered a 7% return — before considering any dividends it also paid.

Return is taught hands-on in Stage 1 — Money, Goals & Your Financial Foundation.

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Related terms

APRAnnual Percentage Rate. The yearly interest cost of a loan, including most fees.CompoundingWhen your returns earn returns of their own, so money grows faster the longer it's invested.Emergency fundCash reserved for unexpected expenses, usually 3–6 months of your usual spending.Employer matchFree money from an employer that matches part of what you contribute to a workplace retirement plan.
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