Calculate arithmetic and geometric mean returns for your investment portfolio. The geometric (compound) return is the accurate measure of long-term investment performance.
Annual Returns
Enter one return per line (as percentage, e.g. 12.5)
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Geometric Mean Return (CAGR)
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Arithmetic Mean
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Geometric Mean
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Arithmetic Mean
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Final Value
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Standard Deviation
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Years / Periods
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Best Year
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Worst Year
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Positive Years
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Negative Years
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Arithmetic Mean Return
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Geometric Mean (CAGR)
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Standard Deviation
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Initial Investment
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Final Portfolio Value
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FAQ
What is geometric vs arithmetic mean return?
Arithmetic mean = simple average of all yearly returns. Geometric mean (CAGR) = compound annual rate that gives the actual final value. For +50% then −50%, arithmetic mean = 0% but geometric mean = −13.4% (you actually lost money).
Why does geometric mean matter more?
Arithmetic mean overstates real returns because it ignores the order-of-returns and compounding effects. Always use geometric mean (CAGR) to measure actual long-term portfolio performance.
What is standard deviation in investing?
Standard deviation measures return volatility — how much annual returns deviate from the average. Higher standard deviation = higher risk. A portfolio with 15% CAGR and 20% std deviation has much higher risk than one with 10% CAGR and 5% std deviation.
What is a good average investment return?
Long-term S&P 500 geometric mean return is about 7-10% annually (with dividends reinvested). Bonds average 3-6%. Real estate 8-12%. Individual stock selection varies widely. Use these as benchmarks.