{"id":2354,"date":"2022-10-05T14:01:22","date_gmt":"2022-10-05T06:01:22","guid":{"rendered":"https:\/\/www.vision.money\/?p=2354"},"modified":"2025-10-27T14:34:13","modified_gmt":"2025-10-27T06:34:13","slug":"faces-on-investment-return","status":"publish","type":"post","link":"https:\/\/www.vision.money\/newsite\/faces-on-investment-return\/","title":{"rendered":"Why Your \u201cInvestment Return\u201d Isn\u2019t What You Think \u2014 The 4 Ways to Measure It"},"content":{"rendered":"\n

You open your investment app \u2014 it says your portfolio is up +12%<\/strong>.
Feels good\u2026 until you check your account balance and it\u2019s barely moved.
What\u2019s going on? Did your app mess up, or is the market lying to you?<\/p>\n\n\n\n

The truth is neither.
Your return isn\u2019t wrong \u2014 it\u2019s just calculated differently<\/strong>.<\/p>\n\n\n\n

That confusion hits almost every investor at some point.
Because there\u2019s not one \u201creal\u201d way to calculate an investment return.
Depending on when<\/em> you invested, how much<\/em> you added or sold, and how<\/em> your app defines \u201cgain,\u201d
the same portfolio can show completely different results.<\/p>\n\n\n\n

Let\u2019s break this down \u2014 not with theory, but with something you can actually use.
We\u2019ll walk through the four main ways returns are calculated<\/strong>, what each really means,
and how to tell which one matters most for your<\/em> goals.<\/p>\n\n\n\n

Why This Matters<\/h3>\n\n\n\n

Return on investment looks simple \u2014 you buy, you sell, you see profit.
But investing isn\u2019t a single event. It\u2019s a moving story of deposits, withdrawals, dividends, and market swings.
Even if the total profit ends up the same, the path<\/strong> \u2014 and the math \u2014 can tell very different stories.<\/p>\n\n\n\n

Most apps only show one number, often the easiest one.
That\u2019s why two investors holding the same stock can see completely different returns.
John, Joe, Ray, and May all invested in the same asset \u2014 but their reports tell four different tales.<\/p>\n\n\n\n

We\u2019ll use one consistent dataset to see how those differences play out.
No stock splits, no fees, no taxes \u2014 just pure return math.<\/p>\n\n\n\n

A Sample Set of Investment Return Calculation Transaction Data<\/h3>\n\n\n

Date<\/p><\/div><\/div><\/td>

Annual Return on A-Stocks<\/p><\/div><\/div><\/td>

John – Hold to Maturity<\/p><\/div><\/div><\/td>

Joe – Buy at the Same Price<\/p><\/div><\/div><\/td>

Ray –  Buy at Different Price<\/p><\/div><\/div><\/td>

May – Sell at Different Price<\/p><\/div><\/div><\/td><\/tr>

2001\/1\/1<\/p><\/div><\/div><\/td>

0.00%<\/p>

<\/p><\/div><\/div><\/td>

$16,000 investment, bought 1600 A shares at $10<\/p><\/div><\/div><\/td>

$10,000 investment, bought 1000 A shares at $10<\/p><\/div><\/div><\/td>

$10,000 investment, bought 1000 A shares at $10<\/p><\/div><\/div><\/td>

$16,000 investment, bought 1600 A shares at $10<\/p><\/div><\/div><\/td><\/tr>

2002\/1\/1<\/p><\/div><\/div><\/td>

-10.00%<\/p>

(2002)<\/p><\/div><\/div><\/td>

A stock, price $10<\/p><\/div><\/div><\/td>

$6,000 investment, bought 600 A shares at $10<\/p><\/div><\/div><\/td>

A stock at $10<\/p><\/div><\/div><\/td>

A stock at $10<\/p><\/div><\/div><\/td><\/tr>

2003\/1\/1<\/p><\/div><\/div><\/td>

66.67%<\/p>

(2003)<\/p><\/div><\/div><\/td>

A stock at $9<\/p><\/div><\/div><\/td>

A stock at $9 <\/p><\/div><\/div><\/td>

$5,400 investment, bought 600 A shares at $9<\/p><\/div><\/div><\/td>

A stock at $9<\/p><\/div><\/div><\/td><\/tr>

2004\/1\/1<\/p><\/div><\/div><\/td>

6.67%<\/p>

 (2004)<\/p><\/div><\/div><\/td>

A stock at $15<\/p><\/div><\/div><\/td>

A stock at $15<\/p><\/div><\/div><\/td>

A stock at $15<\/p><\/div><\/div><\/td>

Sold 900 A shares at $15 total of $13,500<\/p><\/div><\/div><\/td><\/tr>

2005\/1\/1<\/p><\/div><\/div><\/td>

<\/p><\/div><\/div><\/td>

A stock price is $16, 1600 shares, market value $25,600<\/p><\/div><\/div><\/td>

A stock price is $16, 1600 shares, market value $25,600<\/p><\/div><\/div><\/td>

A stock price is $16, 1600 shares, market value $25,600<\/p><\/div><\/div><\/td>

A stock price is $16, 700 shares, market value $11,200<\/p><\/div><\/div><\/td><\/tr>

Total Return<\/p><\/div><\/div><\/td>

Geometric Cumulative Return
60.00%<\/p><\/div><\/div><\/td>

60.00%<\/p><\/div><\/div><\/td>

60.00%<\/p><\/div><\/div><\/td>

66.23%<\/p><\/div><\/div><\/td>

54.38%<\/p><\/div><\/div><\/td><\/tr>

Unrealized Return<\/p><\/div><\/div><\/td>

<\/p><\/div><\/div><\/td>

60.00%<\/p><\/div><\/div><\/td>

60.00%<\/p><\/div><\/div><\/td>

63.75%<\/p><\/div><\/div><\/td>

60.00%<\/p><\/div><\/div><\/td><\/tr>

Arithmetic Mean Return<\/p><\/div><\/div><\/td>

<\/p><\/div><\/div><\/td>

15.00%
<\/p><\/div><\/div><\/td>

15.00%<\/p><\/div><\/div><\/td>

16.56%<\/p><\/div><\/div><\/td>

13.60%<\/p><\/div><\/div><\/td><\/tr>

MWRR<\/p><\/div><\/div><\/td>

Geometric Mean Return<\/p>

<\/p>

12.47%<\/p><\/div><\/div><\/td>

12.47%<\/p><\/div><\/div><\/td>

13.78%<\/p><\/div><\/div><\/td>

16.30%<\/p><\/div><\/div><\/td>

13.46%<\/p><\/div><\/div><\/td><\/tr>

TWRR<\/p><\/div><\/div><\/td>

Geometric Mean Return<\/p>

12.47%<\/p><\/div><\/div><\/td>

12.47%<\/p><\/div><\/div><\/td>

12.47%<\/p><\/div><\/div><\/td>

12.47%<\/p><\/div><\/div><\/td>

12.47%<\/p><\/div><\/div><\/td><\/tr><\/tbody><\/table><\/div><\/div>\n\n\n\n

\n\n\n\n

Explanation of Relevant Fields:<\/h3>\n\n\n\n