Explore commonly used personal finance terms.
Annualized total return calculates the yearly percentage gain or loss of an investment, factoring in dividends, interest, and capital gains over a given period. This metric provides a standardized way to compare returns across investments with different holding periods, as it converts returns to an annualized rate. Annualized total return helps investors evaluate performance consistently, making it easier to compare investment options and assess the effectiveness of portfolio strategies over time.
