If you're a novice investor or a seasoned financial expert, incorporating the Compound Annual Growth Rate into your investment strategy is essential for making informed decisions and optimizing your portfolio for sustained, compounded growth.
CAGR is the best formula for evaluating how different investments have performed over time. It helps fix the limitations of the arithmetic average return. Investors can compare the CAGR to evaluate how well one stock performed against other stocks in a peer group or against a market index.