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

To: Grommit who wrote (56518)1/1/2016 4:53:36 PM
From: MCsweet2 Recommendations

Recommended By
chris714
research1234

  Read Replies (1) | Respond to of 78753
 
You don't divide by the number of years but take the nth root of the number of years that will give you the correct average annual return calculation.

Total compounded return = (1+ Year 1 Return) * (1 + Year 2 Return) * ... * (1+ Year N Return)

Average annual return = (Total compounded return)^(1/N) - 1

For your data I get a 15.02% average annual return over the 12 years.

MC


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