What does the term 'return' indicate in investment terminology?

In investment terminology, the term 'return' specifically refers to the gain in value of the investment. This gain can manifest in various forms, such as capital appreciation, dividends, or interest earned over a specific time period. A positive return indicates that the investment has increased in value, benefitting the investor, while a negative return implies a decrease in value.

Understanding 'return' is critical for assessing the performance of investments, as it helps investors evaluate whether their financial strategies are effective. The focus on the gain underscores the importance of looking at actual financial performance rather than just the initial amount invested or potential expenses. This also highlights the ultimate goal of investing: to increase wealth through effective management and growth of capital.