Stock CAGR Calculator
Compute Compound Annual Growth Rate for your stock investments
Understand the true performance of your stock portfolio by calculating the compound annual growth rate (CAGR) - the rate at which your investment would have grown if it had grown at a steady rate.
Calculate Stock CAGR
Amount invested initially
Current or expected final value
Duration of investment
💡 Tip: CAGR smooths out volatility to give you a clear picture of your investment's annual performance over time.
Understanding CAGR
What is CAGR?
- Measures the mean annual growth rate over time
- Smooths out short-term volatility and fluctuations
- Perfect for comparing different investment options
- Assumes compounding effect on returns
Why Use CAGR?
- Get a clear picture of investment performance
- Compare returns across different time periods
- Evaluate fund manager or stock performance
- Make informed investment decisions
The CAGR Formula
CAGR is calculated using the following mathematical formula:
CAGR = [(Ending Value / Beginning Value)^(1/n)] - 1 - Ending Value: Final value of investment
- Beginning Value: Initial investment amount
- n: Number of years
The result is typically expressed as a percentage representing the average annual return.
Important Considerations
- • Past performance doesn't guarantee future results - CAGR is based on historical data
- • Doesn't account for volatility - Two investments with same CAGR can have different risk profiles
- • Best for long-term investments - More meaningful when calculated over 3+ years
- • Assumes reinvestment - Calculation assumes all gains are reinvested
Smart Stock Investment Tips
Diversify Portfolio
Spread investments across different sectors and asset classes to minimize risk.
Long-Term Focus
Stay invested for the long haul to benefit from compounding and ride out market volatility.
Research & Due Diligence
Thoroughly analyze companies before investing. Understand their business model and financials.
Why Our Stock CAGR Calculator Stands Out
Precise CAGR Formula
Uses the mathematically accurate compound annual growth rate formula to provide precise calculations for investment performance analysis.
Year-wise Growth Projection
Visualize how your investment would grow each year at the calculated CAGR, helping you understand long-term wealth accumulation.
Flexible Time Periods
Calculate CAGR for any investment period from months to decades, with support for fractional years for maximum accuracy.
How to Use the Stock CAGR Calculator
Enter Initial Investment Value
Input the amount you initially invested in the stock. This is your starting value or purchase price multiplied by quantity.
Enter Current or Final Value
Input the current market value of your investment or the final value if you've already sold. This shows the ending value of your position.
Specify Investment Duration
Enter the number of years (can include months as decimals, e.g., 2.5 years for 2 years 6 months) you've held the investment.
Analyze Your Returns
Review your CAGR percentage and compare it with benchmark indices like Nifty 50 or S&P 500 to evaluate performance.
Frequently Asked Questions
What is a good CAGR for stock investments?
A good CAGR depends on the market and time period. Historically, the S&P 500 has delivered ~10% CAGR, while Nifty 50 has delivered ~12% CAGR over the long term. Individual stocks can vary widely - 15-20%+ is considered excellent, while 8-12% is good for stable, blue-chip stocks.
Is CAGR the same as average return?
No, CAGR is different from simple average return. CAGR accounts for compounding and shows the geometric mean return, while average return is the arithmetic mean. For volatile investments, CAGR is always lower than average return and is more accurate for long-term performance.
Can CAGR be negative?
Yes, if your investment has lost value over time, CAGR will be negative. For example, if you invested ₹100,000 and it's now worth ₹80,000 after 3 years, your CAGR would be approximately -7.2% per year, indicating an annual compounded loss.
Does CAGR account for dividends?
CAGR only accounts for what you include in the final value. If you want to include dividends, add all dividends received to your final value before calculating. This gives you total return CAGR, which is more comprehensive than price-only CAGR.
What is the minimum time period for meaningful CAGR?
CAGR is most meaningful for periods of 3+ years. For shorter periods, simple returns are sufficient. Longer periods (5-10+ years) provide more reliable CAGR figures as they smooth out short-term market volatility and better represent true investment performance.
How is CAGR different from XIRR?
CAGR assumes a single lump sum investment, while XIRR (Extended Internal Rate of Return) handles multiple cash flows at different times, like SIPs. Use CAGR for lump sum investments and XIRR when you've made multiple investments over time.