Invest
Cory Diary : Misleading CAGR
By CoryLogics  •  August 2, 2016
Smoothed return It assumes a smoothed return over the period that’s measured. In reality, investments experience significant short-term ups and downs. Be careful when you are sold with 1 Year to 8 Years performance. On 7-8 years, there's a low due to GFC that time in 2008 on crash and huge recovery. All monkeys able to perform. Fine ! Not all monkey just "99.5%". Size of fund What this means is that a fund manager can work on multiple small funds, and then select the few that happens to wins over the measured period and present them to you. Which will convince the most sceptic their performance. Ins and Outs It doesn't work on personal equity investment which has multiple transactions. From Investopedia, "CAGR is very straightforward when there is a beginning and ending value, and set period of time. But in reality, investments, such as mutual funds, ...
...
Read the full article
By CoryLogics
I am not an investment adviser. Nothing herein my blog constitutes investment advice. Is my personal believes that not everyone has to go through the hard way. This blog also serve a purpose to help me record my understanding and personal learning growth. I sincerely welcome all comments.
LEAVE A COMMENT
LEAVE A COMMENT

Your email address will not be published.

*

Your Email Address will not be published
*

Read More Articles
More from thefinance