● The compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment’s life span.
● The compounded annual growth rate (CAGR) is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Investors can compare the CAGR of two alternatives to evaluate how well one stock performed against other stocks in a peer group or a market index.
● There is no definite percentage for a good CAGR when it comes to equity investments. It is a combination of many factors. Higher CAGR is always better but a greater past CAGR does not indicate a greater future CAGR. Remember the warning given by Mutual Funds – Pasts returns do not indicate future returns
