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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: MCsweet who wrote (56516)

1/1/2016 2:50:50 PM

From: Grommit

Read Replies (1) | Respond to of 78751

of course. i also tried multiplying the annual % together (if > zero add one). so 50%, 100% 10% becomes 0.5 * 2.0 * 1.1 = 110%. then subtract 1 and divide by # years = 10% / 3 = 3.3% annual. that makes sense.

but i get 36% annual, which seems a bit high to me because only 2009 was > 36%. but i guess the math works. being +10% after the 50% loss in 2008, then recovering with 110% raises the average.

multiplying from the bottom up:

raw	adj	mult
7.9%	107.9%	536.5%	436.5%
22.3%	122.3%	497.0%	36.4%
4.1%	104.1%	406.3%
22.1%	122.1%	390.2%
7.0%	107.0%	319.7%
29.0%	129.0%	298.8%
111.5%	211.5%	231.6%
-50.7%	50.7%	109.5%
14.8%	114.8%	216.0%
17.5%	117.5%	188.2%
29.0%	129.0%	160.1%
24.1%	124.1%	124.1%

i guess the compounding of the return is causing the higher result. yep. i tried earning 10% annual for 10 years with the multiplying (compounding) -- the calculated return (and your actual return on your money) would be 15.9%.