General

Investment Comparison

Compare two investments side by side on a like-for-like annualised basis.

Intermediate

Introduction

Who this is for: Investors choosing between two opportunities with different profiles.

Why it matters: Investments with different holding periods, income profiles and leverage cannot be compared on headline numbers. Annualising and separating income return from capital return makes them genuinely comparable.

Typical scenario: Choosing between a high-yielding commercial unit and a lower-yielding residential asset with better growth prospects.

Common mistakes:
  • Comparing total returns over different holding periods.
  • Ignoring that a geared investment carries different risk to an ungeared one at the same return.
  • Forgetting transaction costs, which hit shorter holds hardest.

Inputs

Investment A

£
£
£
%

years

Investment B

£
£
£
%

years

Exit

%

Analysis

Investment A returns 12.49% annualised (£112,117 total profit); Investment B returns 11.90% (£120,700). Investment A is ahead by 0.59 percentage points a year.

This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.

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Sensitivity Analysis

Sensitivity

Adjust the variables below to stress-test this scenario. Results update instantly.

3%
-1020
5%
-1020

Export

Live Results

A: Annualised Return

12.49%

B: Annualised Return

11.90%

Better Return

Investment A

Difference

0.59%

Gearing differs materially (2.9x vs 2.0x). The more geared option carries higher risk at the same headline return.
The returns are close enough that the choice should turn on risk, liquidity and management burden rather than the numbers.
A: Income Return8.57%
B: Income Return5.31%
A: Total Profit£112,117
B: Total Profit£120,700