How do I use the Stock Calculator?

Use the free app above to calculate ROI on over 10,000 stocks, bonds, funds, and ETFs over any period of time. Explore the tabs for more charts and tables that support your input. 

Reshape the equation at the top by clicking Edit Formula. The results are shareable! Link directly to the tool results anywhere online.

Explore more recent winners and losers from the Investments tab. Clicking on any asset will send it to the interactive calculator.

What are stocks?

Stocks are a type of security that represents partial ownership in a corporate entity. Stocks are often referred to as shares and are a type of asset. The most common stocks are for public companies like Apple, Disney, and Exxon. Anyone can buy and sell stocks from stock exchanges.

When you own a stock, you become a shareholder of that company. Many people who own stocks only own a negligible fraction of a company. For instance, Disney has 1.825 billion shares of stock available in the market. If you own one Disney stock, you own 0.00000000005% of the Disney company.

Companies sell stocks to raise money for business operations. As more people buy a company’s stock, the stock value will increase. Companies and shareholders benefit when the stock value increases. In fact, the main objective of many public companies is to increase their stock price.

Stocks are a great way to build and store wealth. According to Gallup, more than 55% of Americans invest in the stock market.

How are stocks calculated?

The price of a stock is a calculation of the perceived value of a company divided by the number of shares available in the market. Let’s say a company is worth $1 billion, and there are $5 million shares available. Here, each share would be worth $200.

But stock prices change every second. As people buy and sell stocks, the value of the company goes up or down. If a company’s stock is in high demand, the value of that company will go up.

Stock prices can also be affected by the number of shares available. Sometimes, companies will make more shares available, which lowers the stock price. Companies can also arrange for a stock split. Let’s say you own 1 share of Disney at $200. If Disney announces a 4-to-1 stock split, you will then have 4 shares of Disney at $50 a share.

Stock prices can change due to an infinite number of reasons. Economic factors, company activities, current events, and even the time of day can all affect a stock’s price. While calculating a stock’s price is easy, understanding why a stock has a certain price is far more complex.

What is a good stock profit?

There is no simple answer to an ideal profit from stocks. In simple terms, if you made a profit, you can sell a stock for more than you paid for it after fees, taxes, and inflation. Higher returns typically mean higher risk of loss, so chasing profit alone is generally not recommended. 

Some investors choose to benchmark themselves against “the market” as a whole by comparing it to the S&P 500. From 1957 to 2021, the average return of the S&P 500 was 11.88%.

How are stocks taxed?

In the United States, investments are generally taxed when gains are “realized”. For stocks, this applies to the moment when stocks are sold and when dividends are distributed. It generally does not apply to a change in value due to changing prices.

These are called capital gains taxes. Capital gains taxes tend to be less than regular income tax. Tax rates will vary depending on your income tax bracket and how long you hold the stock.

• The higher income you earn, the higher capital gains tax you will pay.
• If you hold a stock long enough, you may pay the long-term capital gains rate (as opposed to short-term capital gains), at a lower rate.

Always consider the impact of these taxes when calculating your trading profits.

Where can I buy stocks?

Stocks are purchased from a broker. These days, countless online brokers such as ETrade, Fidelity, TD Ameritrade, and Robinhood are available to practically anyone. Most, though not all, offer fee-free trading in 2022.

Most stock purchases, for most investors, do not occur individually. Stocks can also be purchased as a bundle in the form of mutual funds and exchange-traded funds (ETFs). This adds diversification and simplicity.

Often, stockbrokers offer stock investment advice, educational resources, and other tools and services. It’s also worth weighing these features when selecting the broker that’s right for you.

What are good stocks to buy?

Finding a good stock to buy will depend on your investment goals. Are you investing for the long-term or speculating short-term? How high is your tolerance to risk? How much upside is necessary to justify the investment? How will you diversify your portfolio?

Above all, it’s important to educate yourself. Understand whether you’re engaged in  growth vs. value investing. Learn how asset allocations and a formal investment policy can protect you from yourself. If you’re not sure where to begin, we recommend the wealth of free resources on The Bogleheads Wiki as a place to begin your reading.

Definitions

Bonds

Bonds are a form of corporate or government debt that is paid back to investors in fixed installments.

Bond Funds

Bond funds are a form of mutual fund or ETF that hold a diversified portfolio of corporate or municipal bonds as the primary asset. They can be traded just like funds or ETFs that hold stock. After stock index funds, bond funds are the most common investment seen in retirement portfolios as they add significant diversification.

Dividends

Dividends occur when a company pays a portion of its profits to investors. Not all stocks pay dividends. Some investors actively seek out high dividend stocks. Other investors go to great lengths to avoid the tax liability associated with dividend distributions.

Diversification

Diversification is a risk management strategy that reduces the impact of any single investment loss by spreading investments across multiple asset classes, sectors, or stocks.

Exchange-Traded Funds

Exchange-traded funds (ETFs) are similar to mutual funds in that they are pools of capital used for investment purposes. Unlike mutual funds, however, you can purchase shares of ETFs on a stock exchange.

Equity

Equity typically refers to membership interests in a particular company, otherwise known as “stock”.

Index Funds

Index funds are a form of mutual fund or ETF that tracks an entire market index algorithmically. These investment vehicles were invented by John Bogle of Vanguard as a means to passively manage investment funds. 

Market Capitalization

Market capitalization, or “market cap” for short, represents the full value of a company or organization. As it relates to equities, market cap is calculated by multiplying the current market price times available quantity of stock. 

Mutual Funds

Mutual funds are investment vehicles made up of a pool of investor capital that are used to invest in stocks, bonds, and other financial assets.

Updated July 12th, 2023 at 09:08 am by Jerica Kingsbury. Reviewed by Corey Northcutt.

Return on Investment (ROI) Over Time

Return on Investment (ROI) Summary