Average Return Calculator
Understanding Return Calculations
Arithmetic Mean
- Simple average of all returns
- Useful for short-term analysis
- May overstate long-term returns
- Doesn't account for compounding
Geometric Mean (CAGR)
- Accounts for compounding effects
- Better for long-term analysis
- More accurate for volatile returns
- Industry standard for performance
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Investment Tips
- Consider inflation in real returns
- Look at longer time periods
- Account for fees and taxes
- Compare to benchmark returns