How total return works
Total return is the full gain from holding an investment: price change plus income such as dividends, expressed as a percentage of what you paid. It is the honest measure of performance, because price alone ignores the cash a stock paid you along the way. For income stocks, dividends can be a large part of the return that a price chart never shows.
Worked example
You buy a stock at $100. Over a year it rises to $106 and pays $4 in dividends. The price return is 6%, but the total return is 10%: the $6 gain plus the $4 income on your $100 cost. Reinvest that $4 and it compounds. Over decades, the gap between price return and total return on a dividend payer becomes enormous.
Why total return is the real number
Two stocks can show the same price chart while one quietly paid 4% a year and the other paid nothing; their total returns are worlds apart. On Volity, holding a dividend payer as a real share captures both halves of total return, price and income. A price-only CFD captures the move but not the dividend, so total return is the right lens for long-term ownership specifically.
Why it matters
Judging an investment on price alone understates income stocks and overstates pure growth names, leading to bad comparisons. Always compare total returns, ideally with dividends reinvested, when choosing between holdings. Related: dividend yield and blue-chip stocks.
Learn more in our stocks trading guide.
