Investment Returns Calculator

This neat calculator allows you to check how investment strategy, rebalancing frequency, turnover, and tax affect your Investment Returns. You can compare 2 strategies simultaneously to check which one is best.

Investment Inputs  
  Initial Investment ($)    
   
  Dividends      
  Reinvested    
  Spent    
     
  # Years Invested    
   
  Long Term Capital Gain Tax Rate      
  Short Term Capital Gain Tax Rate      
  Dividend Tax Rate      
   
  Expected Return Strategy 1 Strategy 2    
  - Capital Gains    
  - Dividends    
  - Total Expected Return    
       
  Rebalancing    
  Turnover Rate (%)    
       
     
Investment Returns  
  Before Tax Return    
  After Tax Return    



Example:

The default setting compares 2 strategies over 10 years with dividends reinvested:

  • Strategy#1: 12% Returns (8% Capital Gain, 4% Dividend), annual rebalancing and an expected turnover of 70%. This simulates a Value Investing Strategy.

  • Strategy#2: 10% Returns (7% Capital Gain, 3% Dividend), 0% Turnover. This simulates a Buy And Hold Index Fund.

    In this case, you can see that even with annual rebalancing (the calculator always assumes 1 year +1day for annual rebalancing so as to minimize Tax), the Value Investing strategy is better than Buy and Hold an Index.


    After you play around for a while, you'll notice that paying Short Term Capital Gain Tax (that is Rebalancing < 1 year and some Turnover) is one of the major drag.

    Note: The calculator is suitable for Taxable Account.
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