How it works
Return on investment (ROI) is the simplest way to judge how efficient an investment was. Whatever the asset — stocks, real estate, crypto — you only need the principal and the final value. For a more accurate figure, fold in buy/sell fees and taxes before you calculate: add acquisition tax to the principal, subtract capital gains tax from the final value.
FAQ
Q. Is a higher ROI always a better investment?
A. Not necessarily — ROI shows efficiency but ignores holding period and risk, so weigh those alongside the number.
Q. How is this different from CAGR?
A. ROI is the total return over the whole holding period; CAGR annualizes multi-year returns into a yearly average.
Q. Pre-tax or post-tax return — which matters more?
A. If you want to know what you actually keep, post-tax matters far more — enter your after-tax proceeds as the final value.