InvestingAll terms starting with C
CAGR (Compound Annual Growth Rate)
Also called: compound annual growth rate
The smoothed annual rate at which a value would have grown to reach its ending amount over a period.
CAGR converts total growth over several years into a single annualized rate, which makes holdings of different durations comparable.
It smooths away everything that happened in between. Two investments with identical CAGR can have had very different volatility along the way.
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