Question 1

What is a good CAGR for a stock portfolio?

Accepted Answer

For US equities, the S&P 500 historically returns about 10% on average (before inflation). A long-term CAGR of 10-12% is considered good. Anything consistently above 15% is excellent (Buffett territory).

Question 2

Why is my personal return different from the fund's reported return?

Accepted Answer

This happens due to cash flow timing. The fund reports the return of the underlying assets (Time Weighted Return). Your personal return (Money Weighted Return) depends on when you added or withdrew money. If you bought high and sold low, your return will be worse than the fund's.

Question 3

How do I calculate inflation-adjusted returns?

Accepted Answer

Use the 'Inflation Rate' field. Formula: `(1 + Nominal Return) / (1 + Inflation Rate) - 1`. If you made 10% and inflation was 3%, your real return is about 6.8%.

Question 4

Does this calculator account for taxes?

Accepted Answer

No, it calculates pre-tax returns based on the values you input. To see post-tax returns, subtract estimated Capital Gains Tax from your 'Current Value' before entering it.

Question 5

Can I use this for real estate?

Accepted Answer

Yes. Enter Purchase Price + Closing Costs as 'Initial Investment', Renovation Costs as 'Additional Contributions', and Estimated Selling Price as 'Current Value'. This gives you the property's CAGR.

Question 6

What does a negative CAGR mean?

Accepted Answer

It means you lost money. If you invested $10,000 and it's now worth $9,000 after 2 years, your CAGR is negative. Your wealth has eroded.

Investment Return Calculator (CAGR & XIRR)

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