Return on investment (ROI) is the ratio of money gained or lost on an investment relative to the amount of money invested.

Return on investment is often assessed by using an index that provides historical returns on financial benchmarks or investments. Common indices include: 

• Consumer Price Index (CPI)

• Treasury Bill (T-Bill)

• Mortgage Index

• S&P 500

Historically, cash investments have had much lower returns than bonds or stocks.

Typically, investments with the least volatility, such as cash instruments, offer the least return because of their guarantee feature—your risk is minimal. Equity investments can potentially offer a higher return on investment in the long run but are characterized by volatility—your risk is high. Generally government bonds and Treasury bills are considered stable.

Achieving financial stability is important to Americans. As an investor, you are likely to be interested in developing a financial plan that offers flexibility: solutions to suit your changing needs. As you invest, you should consider investment choices that offer customization and factor in your risk tolerance and how much you should invest.

Knowing that you can secure cash that will be readily available not only gives you peace of mind, but also allows you to consider other investment options so that you can maximize your return on investments.