InsiderFlow › Glossary › What is an investment return?

What is an investment return?

A return is how much you gain (or lose) relative to the capital invested, usually expressed as a yearly percentage.

Total return has two components: the price change (capital gain) and the cash flows received (dividends or coupons). A stock bought at 100 that rises to 105 and pays a 2 dividend has returned 7%.

To compare investments over different periods you use the annualized return (CAGR). And real return is what counts: net of inflation, which erodes purchasing power year after year.

Concrete example

A 10% nominal return with 4% inflation is roughly a 6% real return: that's the true growth of your purchasing power.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

What's a good annual return?

Historically global equities have returned 6–8% real per year over long horizons; anyone promising much more with "low risk" deserves suspicion.

Do past returns guarantee future ones?

No: it's the most important disclaimer in finance. The past informs, it doesn't guarantee.