How do you know the real value of your investments? The value of almost every investment changes over time. The amount of this change depends to a large degree on how long you hold onto your investment. An investment's holding period return is the total return from holding an investment for a specific time (its holding period). This is different from an annualized return, which measures the return adjusted for a one-year period, which may be more or less than the actual holding period.

Holding period return (HPR) captures both the change in your investment's value over time and any periodic benefits you receive from it. It is expressed as a percentage, rather than an absolute dollar amount. Because it takes into account both current income and capital gains, it can be used to find the true returns of different types of investments.

Comparing the HPRs of different investments allows investors to determine their highest return per investment dollar. In other words, it offers a relative comparison of all of your investments.