How to Calculate Average Monthly Return

Investors often calculate monthly returns on their portfolio's assets.

When people invest money, they care about what return they will receive, either in the short or long term. Over the course of a year, most investments' returns will vary from month to month. For the investor to see how he did over a year, he might look at his average monthly return for the year. This gives him a sense of how his investment performed during this particular period.


Step 1

Determine the total return over the course of the year. For example, if you purchased a stick on January 1 for $150, and sold it on December 31 for $168, your total return for the year is $18. Your percentage return is 12 percent ( [$18/$150]*100).

Step 2

To determine the average monthly return, divide the dollar return by the number of months in the period. In this case, divide $18 by 12 months to get $1.50 per month.

Step 3

Follow the same approach to determine the average monthly percentage return: 12 percent divided by 12 months equals 1 percent per month.