Holding Period Return Calculator


About Holding Period Return Calculator (Formula)

The Holding Period Return (HPR) Calculator is a financial tool that helps investors evaluate the profitability of an investment over a specific period. It calculates the return generated from an investment, including any income or capital gains, relative to the initial investment amount. Understanding the HPR is essential for investors seeking to gauge the performance of their investments accurately.

Formula for Holding Period Return (HPR):

The formula for calculating the Holding Period Return is straightforward:

HPR = [(Ending Value – Beginning Value) + Income] / Beginning Value


  • HPR: The Holding Period Return, expressed as a decimal or percentage.
  • Ending Value: The final value of the investment at the end of the holding period, including both the principal amount and any capital gains.
  • Beginning Value: The initial investment amount or purchase price.
  • Income: Any additional income generated during the holding period, such as dividends or interest.

The result can be expressed as a decimal or converted into a percentage by multiplying it by 100. A positive HPR indicates a profit, while a negative HPR signifies a loss on the investment.

Understanding the Holding Period Return:

The Holding Period Return is a versatile metric that allows investors to assess the performance of investments, including stocks, bonds, real estate, and other assets, over a specific time frame. Here’s a breakdown of its components:

  1. Capital Gains or Losses: The difference between the ending value and the beginning value accounts for any changes in the investment’s price or market value during the holding period. If the ending value is higher than the beginning value, it represents capital gains. Conversely, if it’s lower, it represents capital losses.
  2. Income: This component includes any income generated by the investment during the holding period. For stocks, it may include dividends, while for bonds, it could be interest payments. This income adds to the overall return.
  3. Initial Investment: The beginning value represents the initial capital invested or the purchase price. It serves as the baseline for calculating the return.

Importance of the HPR Calculator:

  1. Performance Evaluation: Investors use the HPR Calculator to assess how well their investments have performed over time. It provides a clear picture of whether an investment has generated profits or incurred losses.
  2. Portfolio Analysis: When managing a portfolio of investments, investors can calculate the HPR for each asset or investment within the portfolio. This analysis helps them identify which investments are contributing positively to overall returns and which may need to be adjusted or divested.
  3. Risk Assessment: The HPR is a valuable tool for evaluating the risk and reward associated with an investment. By comparing the HPR of different assets, investors can make more informed decisions about where to allocate their capital.

In conclusion, the Holding Period Return Calculator is a fundamental tool for investors to measure and evaluate the performance of their investments. It considers both capital gains and income, providing a comprehensive view of an investment’s profitability over a specific holding period. This information is vital for making informed investment decisions and optimizing one’s financial portfolio.