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Counting the waves…
Counting the waves…
CAGR (Compound Annual Growth Rate) answers "if this had grown at one steady rate every year, what would that rate be?" It smooths a bumpy journey into a single number, which makes two investments easy to compare — but it hides how rough the ride actually was. A stock that CAGR'd 15%/year could have done that by rising steadily, or by crashing 40% one year and doubling the next. Past growth also doesn't predict future growth.