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I used this calculator to compute the CAGR for the S&P 500 from 1995-2015. It calculated the average annual return to be 11.5% before inflation so roughly 9% af
by caublestone 11y ago
I used this calculator to compute the CAGR for the S&P 500 from 1995-2015. It calculated the average annual return to be 11.5% before inflation so roughly 9% after. You are correct that 10% is difficult but you can get really close.
http://www.moneychimp.com/features/market_cagr.htm http://www.moneychimp.com/features/market_cagr.htm
- tunesmith 11y agoCAGR isn't really relevant on a per-person basis, though. It's not like we all receive our investment capital as a lump sum at the beginning of our savings history. This actually makes a huge difference and makes CAGR returns unrealistic.
- jimbobob 11y agoI think you are looking at the arithmetic average, which isn't very useful for the following reason: Year 1: 100% gain Year 2: 50% loss The arithmetic average here is 50%, which the geometric average is 0%. The CAGR listed is going the correct metric to use but that is not 9% after inflation using the date range you provided. I get 7.42% for 1/1/95 - 12/31/14 after inflation and dividends are factored in. Not bad by any stretch of the imagination, though!