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Saving & Investing

Total Return

Also called: total shareholder return, TSR

Total return is price change plus income, which is the only honest measure of what an investment made you. Judging a stock on its chart alone ignores dividends, and dividends have historically supplied roughly a third to a half of long-run equity returns. The distinction shows up starkly in index quotes: a price index and its total-return twin can diverge by thousands of percent over decades. Always check which version a chart is showing before comparing performance.

Formula

Total return = (Ending value − Starting value + Income) ÷ Starting value

Want more than a definition? Learn it in Capital Quarters →

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