Course Content
How to Calculate Return on Investment (ROI)
ROI is a way to measure an investment's performance. As you'd expect, it's also a great way to compare the profitability of different investments. Naturally, an investment with a higher ROI is better than an investment with a lower (or negative) ROI. Curious how to measure this for your own portfolio? Let's read on.
How to Calculate Return on Investment (ROI)
About Lesson

We’ve looked at what return on investment (ROI) is and how traders can use it to make more informed investment decisions. The return on investment formula is a core part of tracking the performance of any portfolio, investment, or business.

As we’ve discussed, ROI isn’t the ultimate metric, but it can be useful. You also need to consider opportunity cost, risk/reward ratio, and other factors that may have an impact on your choice between different investment opportunities. As a starting point, however, ROI can be a good barometer to evaluate a potential investment.