CAGR stands forCompoundAnnualGrowthRate. The formula does not require any values in between because it does not matter. It is a “backward” calculation for the “average” annual growth with known figures. In other words, if I have $100 on the first year and it magically becomes $300 by...
That’s actually a 4.9% CAGR, but the year-over-year volatility in those returns is huge. The reality is that many investments experience significant short-term ups and downs. The CAGR might give a numerically accurate but emotionally misleading impression of performance when smoothin...