GlossaryBeginner
Return on Investment (ROI)
The gain or loss from an investment, expressed as a percentage of what was originally put in.
Return on investment (ROI) measures the gain or loss on an investment relative to its original cost, expressed as a percentage: the change in value divided by the amount originally invested.
ROI is a simple, point-in-time comparison between two values. It does not, on its own, account for how long the investment was held, which is why it's often considered alongside a time-aware measure for comparing investments held over different periods.
Examples
- An investment that grows from $1,000 to $1,250 has a 25% ROI.
- ROI alone doesn't show whether that 25% was earned in one month or five years.