Average Annual Return
InvestingThe mean return of an investment per year over a period, which can differ significantly from compound (geometric) return.
Example
Example: Consider an investor building a $100,000 portfolio. Average Annual Return — the mean return of an investment per year over a period, which can differ significantly — directly affects investment strategy and long-term returns. Getting this concept right can mean tens of thousands of dollars in difference over a 20-year period. Model your portfolio with our investment calculator.