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

To: E_K_S who wrote (74749)	12/31/2023 2:23:21 PM
From: Grommit	Respond to of 78842

BARD and compounding. You are doing good stuff with BARD, I am impressed. But I just asked BARD for CAGR of the NYSE and the results were higher than I expected. So I asked BARD the annual returns of the NYSE and they were flat out wrong. Bard had some negatives when it was positive, and just wrong numbers. As far as reinvesting dividends, I tried something -- First 2 columns here are year and what I recorded as NYSE annual year by year at the time. wrong or right -- let's see where it leads. next 3 -- green section -- this is my calc of the CAGR of NYSE % column. First, I add one to the rate. Then I calc up from the bottom. i.e my $100 becomes $112.2 with 12.2% gain, etc. (Going in the other direction would give the same answer, cumulative property of multiplication) I end up with $294.70 after 2023. I put that in the next column to calc the CAGR. Answer 5.6% CAGR, but I know it excludes dividends. (note this is a correction to prior posting's calculation.) Well, can I just add 1.8% as a div estimate, or are the divs compounded somehow? Next 3 columns (yellow) -- I add 1.8% to each year and do the came calculations. answer -- CAGR is 7.4%, (exactly 5.6% + 1.8%). well, they are additive. But the portfolio balance is $415 vs $295 -- 40% higher, which gives the higher CAGR. Reinvesting dividends does not do anything ungodly to the CAGR rate. Just adds to it. Anyway, financial math lesson for the day...