Stocks ROI Calculator

Stocks ROI Calculator: Understanding Return on Investment, Dividends, and Brokerage Fees

Return on Investment (ROI) for stocks measures the percentage gain or loss on your investment, accounting for capital appreciation, dividends received, and trading costs. The basic ROI formula is: ROI = ((Current Value - Initial Investment + Dividends - Fees) ÷ Initial Investment) × 100. Understanding ROI helps you evaluate investment performance, compare different stocks, and make informed portfolio decisions.

ROI Components: Capital appreciation is the difference between selling price and purchase price. Dividends are periodic payments some companies make to shareholders, adding to your total return. Brokerage fees (buy and sell commissions) reduce your net profit, and even small fees can significantly impact returns on smaller trades. For example, a ₹10 commission on a ₹1,000 trade represents a 1% cost, while the same fee on a ₹100 trade is 10%. Many modern brokers offer commission-free stock trades, but options, foreign stocks, and other securities may still have fees.

Example: If you invest ₹1 lakh in a stock at ₹500 per share (200 shares), and sell at ₹750 per share (₹1.5 lakh), your capital gain is ₹50,000. If you received ₹2,000 in dividends and paid ₹20 buy commission and ₹20 sell commission, your total profit is ₹51,960. ROI = (₹51,960 ÷ ₹1,00,000) × 100 = 51.96%. This represents a strong return, but remember that past performance doesn't guarantee future results. Our calculator helps you understand all ROI components, factor in dividends and fees, calculate annualized returns for multi-year investments, and compare different investment scenarios.