Investment calculator

If you're new to Edward Jones’ investment calculator, see the information below to learn how to use it.

• Initial investment amount: In this section, input the amount of money you're investing. Try inputting different amounts and note you can add to your investments over time as you earn and save more money. The main purpose is to help you see the possibilities. Edit the calculator inputs as many times as you like.
• Rate of return: For this section, choose the percent of return on your investment. Various investment types carry different rates of return, as well as levels of risk. Typically, the higher the risk, the higher the rate of return. Your Edward Jones financial advisor can help you understand the different types of investments and the related risks and returns.
• Length of investment: Enter the number of years you plan to keep your investment in your account. Compare the difference in growth if you start investing today compared to 10 years from now. You can do this by reducing the number of years you can stay invested in the Length of Investment field.

Investing is using your money to buy securities, such as bonds, certificates of deposit, stocks, etc., that ideally increase in value or provide you additional income. Typically, the longer you keep your investment, the better your chances for it to increase in value.

That’s why it’s important to work with an Edward Jones financial advisor, who will work to understand your goals and help you explore different investment options to best meet your needs.

Edward Jones offers many options to save and invest, including these common types of investments.

• Stocks: A stock is a share of a company. Stock ownership entitles the investor to certain benefits such as voting on some company decisions like stock splits, mergers, etc.
• Fixed-income investments: This group of investments includes municipal bonds, corporate bonds, certificates of deposit (CDs), U.S. Treasuries and agency bonds. They pay a fixed amount at a specific time.
• Mutual funds: This type of investment fund is mutually owned by you and other investors. It allows investors to pool their money in stocks, bonds and other investments.
• Exchange-traded funds (ETF): An ETF is a fund that holds a variety of securities in one investment category or class. ETFs trade on an exchange, and their prices can fluctuate throughout the day.
  Unit investment trusts (UIT): A UIT is a portfolio of professionally selected stocks or bonds with a stated expiration date. UITs are not actively traded. They generally have a low initial investment requirement.

It’s helpful to build a vocabulary understanding common financial terms used when saving and investing, including these common financial terms.

• Rate of Return: The percentage increase or decrease in your initial investment’s value over a period of time. This helps investors understand how their investment performs.
• Annualized rate of return: The percentage increase or decrease in your initial investment’s value on a yearly basis, usually considered over several years. The rate provides a better indication of how an investment is performing long term.
• Market index: A measurement that tracks the performance of a specific type of security or basket of securities. Many times, a market index is used as a baseline to compare the performance of similar investments.
• Volatility: A measurement for the ups and downs of a security or index. Understanding the volatility of an investment can help investors determine the level of risk they should expect. Lower numbers mean more stability.
• Standard deviation: This calculation is used to determine volatility. It measures the difference between the average price of a security against major ups and downs. If there are broad price gaps between the average and the high (or conversely the average and the low), the standard deviation would be a higher number than if the price gaps were smaller. For smaller gaps, the standard deviation would be lower, meaning the performance of the security is more predictable.
• Cost basis: This figure represents the cost of a security, investment, etc. It helps investors understand gains and losses, as well as tax consequences.
• Net investment cash flow: Total of all cash flow, including dividends, interest and reinvestments, less cash payouts, such as selling a security or not investing a dividend.
• Investment portfolio: The collection of investments owned by an investor.
• Diversified portfolio: An assortment of investments with varying degrees of returns and risks. This approach helps an investor avoid owning too much of one type of investment, which can increase risk.

How do you calculate how much an investment will grow?

You can calculate an investment's potential growth by increasing the initial amount of money invested by a percentage. You also need to factor in compound interest and any additional money invested. An investing calculator helps with this.
 

What is a good return on investment?

A good return on investment varies from year to year based on interest rates. Also, investments with higher potential returns tend to be riskier. The best return on investment is one that helps your investment grow without exceeding your risk tolerance.