3 Simple Ways to Calculate the Performance of Your Investments

Written By Mary Beth Eastman
Last updated June 5, 2019

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June 5, 2019

Simple. Thrifty. Living.

If you have been investing for a few years, you should take a moment to review your portfolio’s performance. You don’t need a math degree to learn whether your investments are doing well. Instead, you can use these crazy simple ways to calculate the performance of your investments.

As long as you know the amount of money that you have invested and the current value of your portfolio, you can calculate the amount of money that you have earned.

Current Value – Total Investment = Return on Investment (ROI)

With one additional step, you can find out how much money, on average, you have earned each year.

Return of Investment / Age of Portfolio = Return on Investment Per Year

Knowing your ROI as a percentage can make it easier for you to decide how well your portfolio performs.

To learn how much money you’ve made as a percentage of your investment, you need to subtract the amount you have invested from the portfolio’s value, divide the difference by the amount investment, and multiple the quotient by 100.

(Current Value – Total Investment) / Total Investment * 100 = Growth as a Percentage

For example, if you have invested $40,000 in a portfolio worth $100,000, you would get

($100,000 – $40,000) / $40,000 * 100 = 150%

In the above example, you earned 150% from your investment portfolio. That’s an incredibly high return! What if you only saw 5% growth, though? You probably need your portfolio to perform better than that, so you need to consider ways to make your portfolio pay you more money.

You have several options. Some of the most popular include:

  • Moving money from low-return to high-return investments.
  • Investing in small companies that have enormous growth potential.
  • Paying closer attention to how stocks perform on a daily, weekly, or monthly basis.
  • Diversifying your portfolio to earn greater returns without risking all of your money.

Everyone needs to evaluate their investments to make sure they’re getting strong returns. If you aren’t satisfied with the money your portfolio earns, then you can take steps to improve performance.

If you need help choosing stocks, mutual funds, and other investment vehicles, talk to a professional who can point you toward good options. Choosing a robo advisor for your investment needs can take all the guesswork out of balancing your portfolio, maximizing your returns and minimizing your risks. Look at this list of the best robo advisors of 2019. And when you invest with an online investing site, you can make changes on the fly, to make sure your hard-earned money is working hard for you.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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