← Glossary
Total return
Everything an investment earned: the change in its price plus the dividends it paid.
Total return adds the income to the price change. Buy for $400, see it worth $460 a year later and receive $10 of dividends, and your total return is $70 — 17.5% of $400.
Comparing only price changes understates investments that pay dividends, so a fair comparison uses total return on both sides.