January 30, 2017

Investment Return and Rate of Return: What's the difference?

Every investor wants to earn money on their investments. FINRA explains:
"Investment return is the money you make or lose on an investment. Ideally, your return will be positive: your initial investment or principal will remain intact, and you'll end up with more money than you invested."
"Total return is a measure of your profit or capital appreciation before taxes and commissions or fees."
Rate of return = Total return ÷ Investment amount.
The other factor you have to take into account in evaluating your return is the number of years you own the investment. There's a big difference in realizing a return of 16.67 percent on an investment you own for just one year, or what's called an annual return, and realizing the same return on an investment you own for five years. Your annualized return over a five-year period is only 3.13 percent." For more info:


  1. Tom Hofbauer directs the Private Portfolio Management for Trilogy Wealth Advisors. Formerly, Tom was the senior partner responsible for domestic and foreign options trading at Marquette Partners, a private money management group based in Chicago. He was also a floor trader on the Chicago Board of Options Exchange for 15 years before returning to Northwest Ohio with his family in 1997.
    Tom has a degree in Finance from Virginia Tech. A native of Montpelier, Ohio, Tom and his wife have two sons and reside in Bryan. Tom’s passion for horse racing has taken him to the Kentucky Derby each year for more than 20 years. In 2006, he and his family attended each of the Triple Crown races and Tom appeared on ESPN during the Preakness pre-race show as the “World’s Tallest Jockey. “ Tom is also an avid golfer and rabid Ohio State football fan.

    Investment Advisors Northwest Ohio


Financial Planning for Women does not sell, rent, loan, lease or otherwise provide any personal information collected at our site to any third parties.